One of the most popular uses for DeFi at the moment is lending and borrowing. Compared to the traditional centralized systems, decentralized finances can offer instant transaction settlement, the ability to collateralize digital assets, no credit checks, and potential standardization in the future. Lending marketplaces on the blockchain reduce counterparty risk, make borrowing and lending cheaper, faster, and available to more people.
These can include the issuance of stablecoins, mortgages, and insurance. Largely because of the number of intermediaries needing to be involved, the process of getting a mortgage is expensive and time-consuming. With the use of smart contracts, underwriting and legal fees may be reduced significantly. Insurance on the blockchain could eliminate the need for intermediaries and allow the distribution of risk between many participants.
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