Chapter 1
Introducing Decentralized Finance
IN THIS CHAPTER
Defining decentralized finance
Comparing CeFi and DeFi processes
Considering the cons of a DeFi world
Exploring promising DeFi implementations
The modern decentralized finance (DeFi) era truly began with Bitcoin, the first widespread implementation of a decentralized method of recordkeeping that is permissionless yet reliable and secure. Bitcoin effectively provides a currency that doesn’t rely on the stability of a central authority.
The implications of such a technology are huge for developing economies where faith in central government is low and bank runs are a serious risk, if not a reality. Moreover, much of the world’s population is, at most, one generation removed from being forcibly chased from their homes. Just 70 years ago, Seoul, the capital of Korea, was captured and recaptured four times, and families were permanently separated in a war that ultimately resulted in two separate nations. The fall of Saigon 50 years ago resulted in a mass exodus of Vietnamese refugees seeking asylum; and more recently, the fall ...
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