Near Finance Protocol is creating a New Type of DeFi Ecosystem

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Defi

DeFi is a concept for a financial ecosystem that operates digitally on a shared infrastructure. Traditional financial services like borrowing, lending, and trading are available in this world, but they run on a public network that is open to anyone with an internet connection. On this network, much like email does today, the creation and issuance of assets are based on open-source protocols or modular frameworks. 

Between 2020 and 2022, the decentralized finance (DeFi) sector grew by 865 percent, reaching $254.99 billion by the total value locked in December 2021. (TVL). DeFi is still unable to take even 1% of the market share for traditional financial services, despite the high-yield opportunities for developing solutions that give users access to multi-chain capabilities and interoperable blockchain transactions.

Challenges faced by the Decentralized Finance ecosystem – something has to be done

The entry barrier, which is directly related to cost, is one of the ongoing issues preventing DeFi from expanding. DeFi, for instance, frequently necessitates trading on liquidity pools, which entails high fees. The Ethereum network has also come to a complete standstill due to DeFi’s success, and the cost of sending ERC20 tokens has increased. Users struggle to find the same ease of use with getting fiat currency into the system as with decentralized exchanges due to a lack of fiat on/off ramps, which adds another barrier. 

Moreover, the high volatility in DeFi staking has also caused significant setbacks in DeFi progress.  The ability to earn significantly higher APYs than other investment services is why people stake. The stakes market is quite erratic. Holders will eventually experience a loss if, for instance, a staking asset earns 20 percent APY but decreases in value over the year.

Finally, is the issue of centralization in DeFi. Contrary to the primary goal of DeFi – to remove intermediaries, many DeFi projects are, in principle, highly centralized. For example, the Proof of Stake network allows users to stake a share or all their tokens.

However, the disadvantage is that some stakable assets don’t pay rewards daily and mostly come with a lockup duration where stakers cannot access their assets. For example, if the price drops during the lockup period of staking, users will eventually incur a loss.

How then can there be a genuinely decentralized finance system that takes care of all these challenges? 

Read also: What Does APY Mean in Crypto? DeFi for Beginners

Near Finance Protocol – championing a new era of the DeFi ecosystem

A truly decentralized finance ecosystem is the only way to eliminate these dangers and establish an ideal ecosystem.

The Near Finance Protocol lays the groundwork for a genuinely decentralized financial system. The DeFi industry has been searching for a savior, and Near Finance Protocol is it. This DeFi Protocol company has everything the DeFi industry has been lacking.

By reducing the entry barrier into DeFi, Near Finance Protocol is opening the door to more development in the DeFi ecosystem. For example, the non-staking rewards protocol is designed to remove the need for holders to lock their assets to earn. This innovation will, in turn, eliminate third-party interference, thereby giving holders more control over their assets. 

Near Finance Protocol’s extensive ecosystem features DAO, NFTs and Metaverse with a fixed sustainable APY. 

More Developments in the pipeline

Near Finance Protocol is rapidly scaling and innovatively creating lasting products and services to help propel cryptocurrency to complete decentralization. According to the team, all efforts are in place to launch the project soon. There are also plans to launch an NFT builder soon. 

For more information about Near Finance Protocol, check them out here;

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