Decentralized Finance (Defi) Development Solutions addressing the challenges faced by various industries like Bank, healthcare, insurance, and education

Decentralized Finance (Defi) Development Solutions addressing the challenges faced by various industries like Bank, healthcare, insurance, and education

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., 

DeFi Mechanism 

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. 

  • Banks
  • Healthcare (Medicine)
  • Education
  • Insurance

Banks 

Challenges: 

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?

DeFi Solutions: 

  • Users can avail loans without a credit score check. 
  • In the flash loan concept, users can borrow digital funds, earn profit in another protocol, and repay the amount in less than 15 seconds. Can you imagine? 
  • Immune to hack, since the entire system is decentralized. 
  • Requires no physical presence. 
  • Equitable across the world. No rigged approach towards customers. 
  • Independent of external factors like natural calamities, government, etc.,
  • The transactions made in DeFi platforms are pseudonymous, where the identity of the users is hidden. The entire code of the system is out for the public’s view, thus promoting more trust and confidence among consumers. 
  • All DeFi based finance systems need is a smartphone with an internet connection. So it has the massive power of catering to the needs of the global audience. 

Healthcare (Medicine) 

Challenges: 

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. 

DeFi Solutions: 

  • DeFi is a blend of finance and decentralization with blockchain technology. This is mainly aimed at promoting transparency. Hence, the payment regulations can be uploaded for public view, avoiding disparity between patients. 
  • Patients claim ownership over their data on the blockchain network. 
  • Instant medical insurance/loans can be availed with the help of DeFi in the healthcare domain because it reduces the complexity of going through a bank or any other intermediary. 
  • The latest inventions across the world can be fed on the public blockchain network. Since it cannot be edited, inventors claim 100% ownership, and the public is made aware of the advancements.

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. 

Education

Challenges:

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? 

DeFi solutions: 

  • Fee policies can be made public. It creates better trust among the parental community, and hence more admissions. 
  • Fee transactions can be instantly made on decentralized networks. It helps to maintain the payment on record without physical on-paper maintenance.
  • Students’ entire database can be uploaded on the decentralized network. Hence, students and parents gain complete ownership over their information. 
  • Also, decentralized educational institutions can provide instant lending/borrowing platforms for the underprivileged with quality security protocols. 

Insurance

Challenges: 

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. 

DeFi solutions: 

  • Decentralized finance’s core base is blockchain technology. It’s made secure by cryptography algorithms and private wallet keys. Security is a national concern but decentralization systems have effortlessly restored the safety of users’ funds and data. 
  • The reduction of human resources does not hamper the work. In their place, smart contracts, the automated pre-set codes (or) agreement between organization and customers, execute the functions based on the conditions set. Hence, accuracy is 100%, costs are highly reduced, and conflicts are basically zero.
  • Since the system is decentralized and there’s no third-party or a centralized organization involved, it promotes more trust and confidence among users. Every transaction made is public on chain and pseudonymous. Also, with governance tokens, users get to command the functionality of the system.  

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. 

Bottom Line 

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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