3 Reasons Why DeFi Outshines Centralized Finance
Even though DeFi (decentralized finance) is merely ten years old, it is poised to usurp a banking system that predates America itself.
Similar to the advent of the internet, Decentralized finance remains comprehended by a select few, but it will soon gain wide acceptance as its advantages become clear.
With the current bull crypto market underway, let’s explore three of DeFi’s most advantageous applications for 2025:
1. Superior Exchanges Compared to Mainstream Options
DEX refers to decentralized exchanges, enabling users to swap one digital currency token for another.
Just as you might utilize Forex markets to convert pesos into dollars or the stock trading network to trade dollars for stocks, Dexes facilitate the exchange of one crypto asset for another.
Furthermore, Dexes provide thousands more options for cryptocurrencies compared to centralized exchanges like Coinbase, Binance, and Gemini.
How can you possibly engage in the newest presales like $BEST Digital wallet or $SUBBD?
As of mid-May 2025, the total value locked (TVL) in decentralized finance (DeFi) stands at roughly $116.5 billion, according to DefiLlama.
2. Accruing Interest on Your DeFi Crypto Earnings
Lending platforms allow any individual to lend their digital currency holdings and earn interest on them.
In a typical lending framework, the borrower must deposit collateral. The collateral may include tokens such as Bitcoin, ETH, UNI, and the interest returns offered to lenders are significantly, significantly higher than what traditional investors often encounter.
(X)
The interest received by lenders typically starts at around 6% and can soar above 100% ROI … but keep an eye on that chart we found on X if you want sustainable alternatives.
The three predominant platforms for crypto lending and borrowing are Aave, Compound, and MakerDAO (All operating on Ethereum). This provides further reason to remain uptrend on ETH.
3. Centralized Digital Currencies
Oh, hold on. Scratch that, reverse it, akin to Gene Wilder in Willy Wonka.
Central bank digital currencies (CBDCs) seek to impose control. Decentralized finance strives to eliminate control. That represents the ideological division. Stablecoins are crypto assets linked to fiat currencies such as the U.S. dollar or euro but created on decentralized networks.
Currently, USDC, DAI, Tether, and CEL are leading options that provide digital dollars without government oversight. These tokens also yield appealing interest rates on decentralized exchanges and continue to surpass high-yield savings accounts offered by conventional banks.
Concluding Thoughts
Although Decentralized finance is just beginning, the potential to grow your investments and price floor emerging tech startups presents a remarkable investment chance.
The sole barrier hindering further market growth is the entry challenges faced by new crypto investors. This is an obstacle DeFi must overcome in the future. Nevertheless, the opportunity exists.
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Essential Points
- Even though Decentralized finance (DeFi) is merely a decade old, it is poised to usurp a banking system that predates America itself.
- Even though Decentralized finance is just starting out, the chance to grow your capital and invest in upcoming tech startups presents a remarkable investment opportunity.
The post 3 Reasons Why Decentralized finance is Superior to Centralized Finance first appeared on 99Bitcoins.
