What is a DeFi App? And how to build one!
Decentralized Finance Applications
DeFi is short for decentralized finance. It’s an umbrella term for the part of the crypto universe that is focused on building a new, internet-native financial system.
With DeFi, you can do most of the things banks support — earn interest, borrow, lend, buy insurance, trade derivatives, trade assets, and more — but it’s faster and doesn’t require paperwork or a third party. DeFi is global and peer-to-peer, directly between two people, not routed through centralized systems, making it open to all.
In DeFi, the middlemen of the traditional finance sector (centralized systems) are replaced by software.
Getting to Know Your DeFi Apps
DeFi apps are financial applications with no centralized structures behind them. Instead of transacting through banks and stock exchanges, people trade directly with one another, with blockchain-based smart contracts doing the work of making markets, settling trades, and ensuring that the entire process is fair and trustworthy.
Categories of DeFi apps include:
- Decentralized exchanges or DEXES
- Lending & Farming platforms
- Crypto & Stablecoins
- Synthetic assets
- Decentralized Insurance
While diverse and oriented to different kinds of users, all DeFi apps share a set of common characteristics:
- The use of blockchains as the foundation.
- Open source: Code is accessible for developers.
- Interoperable and programmable: The ability to exchange information and adapt depending on the application’s needs.
- Open and accessible to all users: Users with a digital wallet can access DeFi services.
How do I build a DeFi Application?
- Decide what you want to build. Decentralized finance is a vast market with plenty of potential business models.
- Conduct comprehensive market research to get an idea of what your competitors are creating, what features are popular among DeFi users, and what features align with your DeFi business vision and plan.
As Reach was created to make blockchain mainstream, it is an intelligent choice for blockchain developers, being accessible for developers to learn in a matter of weeks and not months, and has considerable developer community support. Having great DeFi projects already built as Humble, xBacked, Vestige, and many more.
If you’re interested in developing a DeFi Application, write us your idea and development requirements. We’ll make sure to help you build a world-class blockchain application.
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And if you want to start your blockchain-building journey, we have the docs for you! Learn Reach here and become a bear builder!