The relationship of DeFi platforms with the financial system goes beyond incorporation. It could be changing the entire world of finance.

Decentralized Finance (DeFi) is one of the new tools that are removing all the foundations of the financial system. It is interesting to assess the relevance of DeFi platforms for a new form of exchange, loans, and development.

Quantum Economics analyst Pedro Febrero explained this new form of loans. He also gave a review of the most important projects within this Ethereum platform.

Febrero considers that Decentralized Finance is quite simple. Likewise, he says that DeFi involves borrowing money from others or, on the contrary, lending money to others.

Integration of DeFi Platforms into the Financial System

Pedro Febrero, who has also been a contributor to important technology news websites, gave a brief description of the financial system.

In this sense, he explained that DeFi platforms have not only adapted to the financial system but also that they are changing it. In this review, he exposed the different phases of the financial system, such as money as a store of value, medium of exchange, and unit of account.

He also explained the role of currencies, both those that represent a haven such as precious metals and Bitcoin, on the one hand, and fiat money, on the other. He also explained the subject of finance, that is, development through interest on savings and credits received.

How are Decentralized Finance Platforms Integrated?

DeFi platforms have a function similar to that of banks, but they are different. As their name implies, they are decentralized and open to anyone who wants to make use of them, unlike traditional financial institutions.

This is one of the differences that exist between traditional banks and DeFi platforms. Traditional banks have been under the control of a handful of entities, especially in the past two centuries, and are only available to select circles of users. For this reason, the vast majority of people do not have the possibility of accessing them.

For their part, DeFi platforms are extremely open to anyone who wants to be part of them. To start working with one of these applications, it is necessary to have access to the Internet network.

Open Networks and Closed Networks

On the other hand, Mr. Febrero described the importance of networks to understand how DeFi platforms operate within the financial system. Regarding networks, they fall into two categories: closed and open.

The former include centralized structures such as Facebook and Alibaba, among others. Similarly, some decentralized structures, such as Amazon or Hyperhelder, belong to the category of closed networks.

For its part, the category of open networks groups decentralized structures such as Linux and Wikipedia. There are also other types of structures, such as distributed ones. The most popular example of decentralized networks are Bitcoin and other similar cryptocurrencies.

It is precisely the area of decentralized networks that sets the standard among investors today. Bitcoin, as well as other decentralized cryptocurrencies, have proven the best option in the market.

By Alexander Salazar

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