Business Asia

DeFi Platform Services You Should Use in 2022

2022 has started, and new technologies are helping people to redefine and repurpose their goals. One fact about New Year resolutions, whether it is getting a new academic credential or buying a car, is that there is some financial consideration.

Therefore, you need to be holistic and think whether the traditional financial services are offering appropriate solutions. For most people, the idea is to drift away from traditional financial services, and the best way to go is decentralized finance (DeFi). 

DeFi is a new concept that is designed to help people rethink the idea of finances as we know it. If you regularly send funds abroad, how much are you charged? Are you satisfied? If it is taking a loan, are you okay with the extensive scrutiny done by banks? DeFi platforms are offering the best alternatives so that no matter what financial service you want, it will be available more conveniently. 

This post takes a closer look at DeFi platforms to determine some of the services that you need to use in 2022. Why get stuck to the traditional financial services when there are so many benefits to draw from DeFi (check Adrian’s Cheng article).

Staking

If you ask most people, they will tell you the efforts they have been making to generate some additional income.

Now, we have an additional channel where you can make more income: crypto staking. Indeed, this is far much better because the income is passive. 

Staking is the locking of your coins to a respective blockchain network so that they can help with data validation. In blockchain networks, transactions are checked and confirmed by nodes/users spread on the network. Locking your proof of stake (POS) coins activates them to help confirm these transactions. They also help with governance and security. In return, you get some reward which is sent directly into the wallet. 

Crypto Borrowing

This is a process of taking credit from DeFi platforms as opposed to banks or credit card companies. Crypto borrowing requires you to commit your coins as collateral to secure a loan. Then, the coins are returned to your wallet when you repay the loan. 

The main advantage of crypto borrowing is that you are not subjected to extensive scrutiny.

There are no background checks to review personal credit history or bank accounts before the loan can be processed (Adrian Cheng). Instead, all that you need is your crypto coins to secure the loan. Crypto borrowing also stands taller compared to standard bank loans because of the following attributes: 

  • Easy to apply. 
  • The interest rate is low. 
  • It is automated through smart contracts. 

Yield Farming 

Another interesting service offered by DeFi platforms is yield farming. This works like staking but differs in that you do not lock the coins in the network. Instead of locking the coins, they are used to provide liquidity on the platform. At the end of the agreed period, you are paid interest. 

Another key difference between staking and yield farming is that the former only works with coins that are based on POS protocol. However, any other coin can be used in yield farming.

Remember that the overall amount you can make in yield farming depends on the committed coins, selected DeFi platform and period you have committed the coins. 

2022 is a great year because it marks the moment when the globe is rising from the shadows of the deadly pandemic. Therefore, you should also rise and purpose to grow further and faster. DeFi platforms, such as Mantra Dao, offer an excellent opportunity to enjoy finance services with a difference. Do not just stick to the traditional way of doing things: make sure to try the DeFi services we have listed above.