The COVID-19 outbreak of 2020 threw most sectors almost to the edge of a precipice. For individuals, things were even more challenging as traditional banks sealed most avenues that people could have used to acquire loans, but every cloud has a silver lining because the rigidness elevated a new avenue that most had not thought of: decentralized finance (DeFi).
As the term decentralized finance suggests, it is the method of availing different financial services in a decentralized manner. It removes centralized management, such as bank operations, central banks, and credit card companies, so that you are in charge of your financial services. Here, it is up to you to decide how much and when to send your funds. Even if it is in the middle of the night, you will still be able to send the funds.
So, are you ready to get into the world of DeFI, where you are in total control? Here are the main steps to follow as a beginner.
Select the Preferred Wallet and Buy Some Crypto Coins
To access the different DeFi services, you will require some crypto coins. These are the native coins or tokens in blockchain networks.
Good examples include ETH and ADA. To buy the selected coins, you will require a crypto wallet. This is a service, software, or device that you can use to store the coins. Common wallets you can select and use include:
● Hot wallets: These wallets are always online, which means it will be pretty easy to access them from anywhere across the globe. However, the fact that they work online can make them easy targets for hackers.
● Cold wallets: These wallets are designed to help you store your coins offline. However, you need to plug them into a computer with the respective blockchain wallet to make a transaction. Good examples include paper and hardware wallets.
● Desktop wallets: These are software wallets that must be installed into a computer to function. Every time you need to make a transaction on the wallet, you have to connect the computer to the internet. You need to be extra careful with these wallets because formatting your computer or losing it might mean losing your coins.
Common DeFi Services
There are many DeFi services and products that you can use. Because they are run by smart contracts, it is important to check at the terms and conditions of each before starting. So, here are some of the top services to expect:
● Crypto Lending: This service involves using your crypto coins as collateral to secure a loan from the DeFi platform.
● Crypto Staking: For cryptocurrencies that use proof of stake (POS) protocol, decentralized finance platforms allow staking, which you can use to generate passive income.
● Identify Top Decentralized Projects: In the crypto world, timing is very important to make good returns on investment. Good DeFi platforms can help you to identify good blockchain projects so that you can take advantage early enough and optimize profitability.
How to Stay Safe when Using Blockchain Technology
As you plan to get started with DeFi platforms, it is also important to think about your assets’ security. The good thing about DeFi services is that you have the opportunity to select a platform that is more secure. Here are some indicators of a good and secure platform:
● Run by professionals.
● Services and agreements are automated through smart contracts.
● Uses cold wallets when pooling and staking clients’ coins.
● Should have regular updates for its security systems.
● Top-notch customer services.
As you can see, DeFi is the new way of doing things on matters related to finance. Simply put: every service you want from a bank is likely to be available in a DeFi platform. The decentralized platform is also likely to have better terms and conditions for the services offered.
For all DeFi-related services, one of the best platforms for you is Mantra Dao. Visit them now to learn more and talk to their customer support.