What is it
DeFi applications leverage decentralized networks to create financial applications via trustless and transparent smart contracts that run as programmed, removing the need to for intermediaries. In simpler terms, DeFi is financial software built on the blockchain that can be used to piece all kinds of products together like lego blocks.
DeFi applications aim to be highly accessible and make financial services available worldwide. DeFi is heralded to bring worldwide financial inclusion and open finance. Due to the sensitivity of financial services’ data, it is paramount that DeFi applications are created with data security and privacy in mind.
The largest category of DeFi applications by far is borrowing and lending, capturing 75% of total DeFi market value of $826M USD*. Among them, the use of stablecoins is enormous. Stablecoins, a type of DeFi, are a class of cryptocurrencies that offer price stability by the backing of reserve assets. Other examples of DeFi include decentralized exchanges, assets, derivatives, and payments.
*1st of May, 2020. For the latest stats and figures visit defipulse.com
DeFi and Dusk Network
Dusk Network is well suited for the creation of privacy-respecting DeFi solutions. Due to the privacy guarantees in confidential smart contracts, DeFi applications such as lending and borrowing platforms can create decentralized applications that adhere to compliance principles and general data protection legislation.