Web3 can offer open, decentralised data stores
Web3 is also attractive because it is decentralized. This means that users no longer need to rely on companies such as Google, Apple or Facebook to provide Internet services. Instead, they can own and manage the internet and dictate governance, growth and sustainability.
Through decentralization, Web3 storage allows users to own their data while retaining full access to storage and communication. This user-centric online version runs on a blockchain network, replacing thousands of distributed computers (or "nodes") around the world with a centralized single server. Instead of using traditional channels and methods, they communicate with users through decentralized applications.
DeFi can offer fast, secure payments
DeFi is growing in popularity as it reduces human error through smart contracts, always-on market access, and removal of intermediaries. DeFi turns money into a programmable and interoperable protocol, much like previous versions of the internet digitized information and content.
DeFi is also more efficient than the traditional financial system. People can send money directly to someone without going through an intermediary. All transactions are recorded on the blockchain and can be seen by anyone with an internet connection, making them more transparent and accessible.
The future of fintech is DeFi and Web3
Nonetheless, Web3 is already starting to gain traction across industries, especially in finance. Even market forecasts paint an encouraging picture for the future of DeFi. There is no doubt that DeFi or Web3 in the financial field is here to stay. Over time, decentralized finance will open up new markets and create new business models, benefitting stakeholders in the financial system.
As Web3 excels in the financial sector, with qualities such as decentralization, transparency, autonomy, and security, customers and financial service providers will not look back when they venture into the DeFi space.
From the above discussion, it is easy to conclude that DeFi is a perfect example of the realization of Web3 in the financial field. DeFi demonstrates how cutting-edge technology can bring unprecedented efficiencies to the financial sector.
But will DeFi go mainstream anytime soon? Despite the constant innovation in the Web3 space, there is still a long way to go before the internet is fully decentralized. This means we will have to wait for DeFi to become the norm.
By Roger K. Olsson