What Is Traditional Finance & Why Is the Current Financial System on Shaky Ground? | HackerNoon

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Traditional financial systems are in trouble. DeFi is trying to fix that. - by tarun_rama defi blockchain

If you were to step outside today and ask a group of ten people for their opinion about the state of the financial system, you'd likely get twenty differing opinions.

The current financial system is inherently centralized, and at the same time, more decentralized alternatives are growing in popularity.The current state of finance is dominated by a few big players. The financial system is opaque, inefficient, and unfair. This has led to large amounts of speculation and high fees for the end user.

The DeFi movement aims to change all that by bringing transparency back into our financial system while lowering costs and allowing everyone accesses to capital markets at scale.DeFi is a broad term that covers many different types of decentralized finance. It's a new financial system allowing anyone to create their own loans or tokenized assets.

The projects work together to form a cohesive whole: they're all parts of one giant ecosystem made up of people who want to help each other succeed financially through mutual cooperation rather than traditional business models like banks or lending companies.In the past few years, a new type of financing has emerged using blockchain technology. DeFi is not just about finance; it's about decentralization. It's not just about the future; it's happening now.

For example: if one protocol fails, then all tokens related to it will suffer too—and those who own those tokens may lose money because they're no longer backed by anything tangible .

 

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