As much as the global economy continues to grow, we are leaving billions of people behind who don’t have bank accounts, a reality that is exacerbated by the economic impacts of the coronavirus. Without a bank account, a person can’t get a loan, invest or earn interest on savings. Decentralized finance, or DeFi, confronts this problem head-on by democratizing access to financial services.
Anyone with an internet connection can deposit digital assets into DeFi protocols and start earning interest as passive income. They can put up their digital assets as collateral to acquire a loan. They can earn passive income by yield farming or by adding their digital assets to liquidity pools and collecting fees on trades.
Making these types of wealth generation opportunities available to everyone, including people in developing regions, is what will eventually close financial inclusion gaps, help people out of poverty and transform global monetary systems for the better.