Decentralized Finance is a permissionless open alternative to all our traditional finance services. Here, the whole financial system is decentralized without any intermediary. The dependency on a third-party is eliminated in DeFi. In simple words, it means, when you purchase/perform transactions online, you can directly pay from your wallet without the support of any external parties like banks, UPI applications, etc.,
Decentralized finance’s (DeFi) integral part is smart contracts. Smart contracts are pre-coded, automated agreements that function based on conditions using blockchain technology.They don’t need a bank or lawyer to process.
Example: You wish to send $7 for a meal only when the vendor delivers at your home. This condition is coded on the smart contract. Once the condition is fulfilled, the transaction takes place on its own.
Now that the concept of decentralized finance (DeFi) is understood, let’s analyze how it impacts the major industries across the world.
If you wish to borrow a sum of money from a nearby bank, the complications involved in the process are tedious.
From manual filling out of forms to credit score check, the time it consumes, and the difficulties faced are massive. In some cases, certain banks even misconduct with their customers with a discriminative approach.
The alternate option to banking organizations is private lending and borrowing. Since that cannot be regulated and the parties are mostly untrustable, loanees often encounter conflicts.
Lending and borrowing practices are essential to either maximize our income or meet our urgent demands instantly. But since the existing system is rigged with flaws, is there a way out to borrow and lend funds fast with proper security?
The size of the global healthcare IT market is expected to reach over $228.79 Billion by the end of 2020. Despite a staggering market, it’s not to confirm that healthcare is devoid of concerns.
From mishandling bio-wastes to data fraud, the industry is ridden by a good deal of challenges. Also, another major barrier encountered by patients is the biased approach from medical organizations, ranging from fees to facilities.
Healthcare is a fundamental right for every citizen. When that’s objected with an abominable payment structure, an individual has no other way but to sell his assets. In simple words, to survive, one has to almost die.
And, to make the matters worse, this continues to loom larger due to technological advancements. Doesn’t it defy the sole purpose of technology?
However, decentralized finance seems to be the need of the hour in healthcare too. Here’s how the existing challenges can be solved by DeFi.
Such solutions could soon start molding the entire system into betterness because innovations have already started disrupting the industry.
Example: Medical Veda, a DeFi based healthcare organization, has set up its P2P trading platform on which patients can instantly borrow loans for treatments with crypto assets as collaterals. By effectively bypassing banks and getting funded within minutes, Medical Veda lends its supporting hand to victims instantaneously.
Parents are increasingly moving towards the concept of online learning (or) self-learning. Traditional schools face the risk of going obsolete in major parts of the world.
This can be much attributed to the partial approach towards students and the steady surge in fee structure.
Rigged evaluation systems, flawed hiring policies, and inefficient personnel have been the major causes of the decline in the reputation of schools and education.
How can education institutions be decentralized?
If so, does it really benefit the student community?
It’s reported (and obvious) that people have trust issues with insurance companies. Mainly because either they become financially unstable or involve in conspiracies behind the customers. This often leads to abrupt shutting down of the organization.
Not just insurance but any centralized server is subjected to the data breach. However, since the insurance sector deals with money and private information of millions of customers, it’s high time organizations scrutinized and strengthened their security protocols.
Poor manpower resources, occasional inefficient training, and false promises. These are the causes that result in multiple manual errors in the working process involved in data management and lead to life-changing losses.
Another branch of trust issues arises from the board members. Often they tend to hide their incompetence, faults, and other vile backstage decisions. Sometimes, they advertise without disclosing the high premium involved. It could only worsen their brand authenticity.
Alarming fact - political influence is found in the majority of insurance companies. This cannot be prevented by a common man. Also, external factors like natural commodities can sometimes destabilize the organization, and its users would have no idea if they’d be covered after the disaster. All points to transparency and trust issues, again.
Example: Nexus Mutual:
With the help of a risk-sharing pool, Nexus Mutual has created a decentralized insurance on Ethereum. Members govern the pool and their rights are represented by an NXM token. Anyone can purchase insurance on any public Ethereum smart contract. So, users’ assets deposited in DeFi protocols like Dharma, Compound, etc are insured.
Though DeFi is in its nascent stage, as we explored, it’s potential is staggering. If it could effectively transform such major industries, fraud and cyber-vulnerabilities would be greatly reduced in our society, allaying the fear of millions.
Osiz Technologies, a leading DeFi Development Company, has 10+ years of experience in blockchain technology. Our pool of blockchain architects and DeFi developers are guaranteed to deliver quality DeFi development services to launch your DeFi platform in healthcare, education, finance (or) insurance.
Want to enhance your industries with Decentralized Finance (DeFi)? Contact Us and share your business demands with our experts here
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