Decentralized Finance: A Profitable Alternative to Traditional Banking
If recent events have shown us anything, it’s that the traditional banking system isn’t as stable as people hoped.
Two global financial crises in the course of fifteen years is enough to leave anyone jaded. And astronomical inflation and a shaky global economy have left people running in every direction, searching for something to hold onto.
For many people, traditional assets like gold or land are the only sure hedges against inflation and other macroeconomic earthquakes. But a growing number of people have begun exploring emerging, digital assets. Blockchain technology has made it possible to create entire economies on the internet, powered by code rather than by central banks or governments. It’s an evolving concept known as decentralized finance, or DeFi.
DeFi offers a number of advantages over traditional banking, including greater transparency, increased security, and lower costs. But those aren’t its only benefits. DeFi has the potential to deal with the world’s inflation problem once and for all. And it could benefit you in even more immediate, tangible ways.
So, let’s explore the world of DeFi, including the difference it could begin making in your life right now.
What is decentralized finance?
DeFi refers to the shift from traditional, centralized financial systems to peer-to-peer finance enabled by blockchain technology.
In a traditional financial system, transactions are processed by central institutions like banks or government agencies. These institutions act as intermediaries between parties, verifying and facilitating transactions. This means that they can control the flow of money and information, which gives them an inordinate amount of power.
Blockchain technology breaks the monopoly previously held by central banks and governments. It allows transactions to be recorded simultaneously across a vast, interconnected network of computer nodes. And since every computer on the network has a copy of the whole ledger, each being updated at the same time, it’s impossible to hack or illegitimately alter. The blockchain distributes power democratically, across the whole network rather than placing the trust and control in the hands of private or nationalized entities, aka the elites, the few, the powers that be.
In 2015 when Ethereum was created the possibility of true DEFI was born. Taking things a step further than Bitcoin, the original cryptocurrency, Ethereum has incorporated code into its blockchain. This has allowed for the creation of “smart contracts” on the platform, multiplying its potential exponentially. This is the reason it’s become a growing ecosystem of decentralized applications.
Ethereum offers alternatives to everything from loans and savings accounts to insurance and derivatives. By some estimates, the value locked in Ethereum’s DeFi protocols has already surpassed 31 billion dollars. With investments pouring into this emerging sector, it’s safe to say that DeFi is here to stay.
Ethereum was the first robust, programmable blockchain. The Binance Smart Chain, or BSC, also offers a secure, reliable platform for Smart Contracts, as well as the trading and staking a variety of tokens, including Ethereum, Cardano, and more. It also has some of the lowest gas fees available. Within the Binance ecosystem, users can enjoy various services, including margin trading and futures contracts. It’s also one of the few platforms that offer a decentralized exchange. This gives traders greater security and control over their funds.
DeFi as a hedge against inflation
Inflation is a major concern for anyone who holds investments in cash or other fiat currencies. Over time, the value of these investments will erode as the purchasing power of the currency declines. This problem only grows when governments and central banks suddenly increase the money supply as they have over the past few years.
One way to protect against this is to invest in assets that are not subject to inflation, such as gold. But cryptocurrency can play a similar role. Most cryptocurrencies include a mechanism to increase the currency or token supply, but it happens at a more moderate pace. And generally, there’s no way for anyone to arbitrarily introduce mountains more all at once. This makes cryptocurrencies much more resistant to inflation than fiat money.
Another option is to use DeFi (decentralized finance) protocols to earn interest on your investment. These protocols are designed to function without a central authority, and they often offer much higher interest rates than traditional financial institutions.
DeFi as protection against macroeconomic events
One of the main advantages of DeFi is that it is not subject to the same regulatory restrictions as traditional financial institutions. This means that DeFi projects can offer a higher degree of security and transparency. In addition, DeFi protocols are often built on blockchains such as Ethereum and The Binance Smart Chain, which offer a high degree of flexibility and programmability. As a result, DeFi projects can offer a host of features and functionality.
One way that DeFi can protect you against macroeconomic events is by offering a level of flexibility that the traditional banking system cannot compete with. The REX protocol, for example, is comparable to a Certificate of Deposit, but with innovative investment features. This is a next-gen savings account that has built in investment features for accruing high APR rewards, called staking. REX also allows you to sell your stakes on the native Decentralized Stake exchange.
In addition, the decentralized nature of DeFi means that it is not subject to the same geopolitical risks as traditional financial institutions. This makes it an attractive option for investors who are looking for a secure way to invest their money in the same technology that is currently reshaping the internet and many other aspects of our lives.
DeFi as a passive income generator
One way investors earn passive income with DeFi is by staking crypto assets.
In the example of REX, when you stake your tokens, what you are really doing is converting your REX tokens into shares. Your shares represent the percentage of the APR generated by the smart contract and is directed to you as rewards. The more shares you have, the higher your APR will be. As your stakes mature you will unlock them, and the contract re-mints your REX back to you, along with all of the rewards that it generated for you. You may choose between selling your REX for BUSD, or creating what is called a Staking ladder.
A staking ladder is a calendar of stakes, and creating them is how the REX protocol is really meant to be used. The longest stake you can make in the REX protocol is 10 years. Some of our investors have stakes unlocking every month, or even every week. This generates a stream of passive income. One recommendation for Investors could be to sell the rewards of a mature stake as passive income, and re-stake the principal for 10 years. This builds out your staking ladder perpetually. A very generous 50%+ APR is common for 10 year stakes.
REX is perfectly coded to create financial freedom for everyone, forever.
The future of DeFi
The future of decentralized finance (DeFi) is promising.
With the rise of Bitcoin, Ethereum, and Binance Smart Chain, DeFi has gained popularity due to its trustless and permissionless nature. What this means is that anyone can access these platforms without having to go through a centralized authority. This is attractive to many because it gives them more control over their finances, and allows investors an alternative to the ageing global financial system.
Furthermore, DeFi is accessible to anyone with an internet connection. In the future, we can expect more people to adopt DeFi as it offers a more convenient and secure way to manage one’s finances. Additionally, DeFi protocols are constantly evolving and becoming more robust. We can expect new features and improvements that will make managing finances even easier.
DeFi is still in its early stages, and the REX protocol is pushing the boundaries for advanced financial tools on the blockchain. The benefits and possibilities of DeFi over traditional banking are numerous and is a signal for big changes and evolution of our of the world’s financial system. If you’re interested in getting involved with DeFi, consider the Rex Protocol. We invite you to take the time to properly understand REX before investing. Some suggestions are below:
Do your own research.
- If you are new to Crypto, please watch our Youtube REX UNIVERSITY series.
- Listen to the REX TALKS series with Thomas, the Creator of REX.
- READ THE WHITEPAPER! There is also a full walkthrough of the whitepaper here created by DR. Kelly Snook. Former NASA scientist and community member.
- Go through the links on the linktree.
- Read audit 1 and 2 and the hackathon report. These reports show that the code does exactly what is described in the whitepaper.
- You can also audit the code yourself. It is published here.
Meet the community
- Join us on youtube, twitter, and medium.
- Ask any questions in our telegram group, or discord server. Our community is always ready to engage and resolve with any doubts or comments you may have.
- Reach out to marketing@rex-token.com for partnership inquiries
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