At the moment, decentralised finance is still tiny compared to the rest of the financial world, but is growing quickly, and its users are predominantly tech-savvy cryptocurrency holders. The core concepts of decentralised finance – open access, transparency, and equality – make it appealing to a huge market, including the unbanked and the hard to bank.
It will take time for Defi applications to become sufficiently user-friendly for beginners to be able to access them with confidence. Given the low interest rates currently available in traditional finance and the attractive yields available in Defi (APYs can run into double or even triple-digit percentages), it’s easy to see why Defi is so enticing.
Though small investors can understandably need time to adjust to the new world of DEFI, professional investors and financial institutions have a huge motivation to look closely the opportunities within DEFI given the superior return on capital they can generate. We look at more advanced methods for capturing yield, but mitigating risk in later article looking at a concept called contango.
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