In the past few years, cryptocurrency has taken the world by storm. Despite doubts, tokens like Bitcoin are becoming a significant force in the global economy. While cryptocurrency itself is still a new field for many people, those more profound in the crypto world are exploring new and exciting frontiers of this financial technology.
DeFi, or decentralized financial services, is the term used to describe the growth in the number of cryptocurrency trading platforms. These platforms allow users to conduct trades on their terms without relying on a centralized exchange.
The growth of DeFi has been dramatic and unexpected; however, it seems that it is here to stay. There are now over 200 different DeFi platforms available worldwide. But how did this happen? And why is it so important?
The first primary reason for DeFi’s growth was the rise of decentralized exchanges (DEXs). While these exchanges have existed since their inception in 2009, they were not widely used until 2017, when Ethereum launched its first DEX called EtherDelta. This platform allowed users to trade cryptocurrencies without relying on a third party like Coinbase or Gemini. Instead, users could conduct their trades directly with each other using smart contracts as escrow agents for these transactions.
However, there are some limitations with DEXs that need to be addressed before they can become mainstream solutions for cryptocurrency trading platforms, namely price volatility and scalability issues which prevent them from being able to compete with centralized exchanges like Binance or Coinbase when it comes down to volume traded per day.
Recently, many people in the world of crypto have been changing their buying habits and the way they make money. While traditional, centralized exchanges dominate the market, decentralized finance has become more prominent. Kirill Suslov, CEO of the popular mobile trading platform, TabTrader, believes decentralized exchanges are the future of cryptocurrency.
Indeed, cryptocurrency was invented to remove the control that banks and institutions have over money, as well as financial products and services. The first crypto exchanges to come on the market were still centralized, however, requiring an authority to validate all transactions. This limits the possibilities of cryptocurrency and makes these exchanges vulnerable to cyberattacks.
To stop hackers, traditional cryptocurrency exchanges generally require personal data and some control over your funds. While this information and control are essential in keeping these exchanges secure, they can deter traders who would rather keep their data private. In addition, the centralized nature of these exchanges means that if a hacker does manage to get into the system, they can do a lot of damage.
These issues with traditional cryptocurrency exchanges have led to the growth of a field called decentralized finance, or DeFi for short. With DeFi exchanges, there is no need for an independent authority to validate all transactions. Self-executing contracts instead validate transactions. The system keeps track of transactions on distributed ledgers or blockchains that cannot be edited once written. The data is also distributed in nodes spread throughout the network, meaning that a hacker would have to successfully attack all of the nodes at once to hack into the network.
The advantages of DeFi go beyond privacy and security. Decentralized exchanges allow for easy trading between individuals, increasing the opportunity to earn interest off your cryptocurrency holdings. With simultaneous sharing and updating of records, exchanging also becomes cheaper, faster, and more effective.
Firstly, choosing an exchange can be quite a process. It can be hard to sift through all the new exchanges popping up and do the proper research to choose the right one.
In addition, decentralized exchanges frequently have great back-end technology, but they aren’t always easy for users to navigate on the front end. Users have to sign up for each exchange, often needing to go through a complicated process and separate paperwork for each. Even once you’ve made multiple accounts, you’ll need to keep switching between apps to check information and trade. This makes it harder for people to diversify their DeFi holdings, increasing the investment risk.
Cryptocurrency trading platforms are one of the essential parts of cryptocurrency. They provide users with a way to buy and sell cryptocurrencies, as well as trade them for other currencies.
The first cryptocurrency trading platform was arguably MtGox, which was founded in 2010. It was initially a place where users could trade bitcoins for USD or other currencies. However, it did not last long because of security issues and other problems.
Other platforms have appeared on the scene, including Binance and Coinbase Pro. These are just two examples of platforms that allow users to buy and sell cryptocurrencies using fiat money such as USD or EUR (euro).
These platforms generally offer different types of services: some allow you to access your account easily while others require you to download an app first so you can use their services on your phone or computer device instead; some offer better security features than others do; some high charge fees while others charge low ones.
Indeed, cryptocurrency trading platforms are changing the game for decentralized exchange users. Some of these platforms, such as TabTrader, aggregate data from 40 different exchanges into one user-friendly app that allows users to see trading data, get alerts, and trade across exchanges. And they’re motivated by a mission to make DeFi accessible to all.
“We believe that every human has a chance to become financially independent,” said Suslov. “We get up every morning to enable investing for everyone in the world. One of our users quit his job in 2017 and has supported his family only via trading in TabTrader since. This is the best example that proves we are on the right track. We believe that DeFi is person-to-person without an intermediary and thus should be mobile, just like TabTrader.”
For instance, with the TabTrader app, users can easily explore exchanges, compare data, and trade without signing up for multiple accounts or switching between different apps. Users can plug their account information into the app and make purchases through connected exchanges without signing up for each one separately. TabTrader never has access to user funds, though. They make their money through rebate fees on transactions made through the app, ads, and through a monthly subscription they offer.
While there have been aggregation apps, most are traditional Chrome browser extensions only for desktop use. Modern ones, such as Binance and especially TabTrader, have put their focus on mobile technology, becoming one of the world’s top 8 crypto apps in both the iOS and Google Play stores. Furthermore, they’ve reached this rating without any paid marketing, which is a testament to the value they provide to their customers.
In the fast-paced crypto market, especially with decentralized trades and new tokens, a good mobile app allows users to check on their assets and make trades no matter where they are and what else they’re doing. Especially for traders looking to make more volatile and risky investments, this on-the-go functionality is essential.
In this aspect, you may think of Binance or TabTrader. However, TabTrader differs from others as it offers helpful and personalized notifications for users looking to trade on the go and track their assets efficiently. Their cross-exchange price alerts notify users when a token exceeds or exceeds a specific value. This feature is also offered in some exchange apps but with varying reliability and customization.
If nothing else, DEXs' popularity is a testament to their usefulness and the growing power of decentralized finance. The TabTrader platform alone has received over 74,000 5-star ratings, and the average user opens the app seven times a day—engagement on the level of Facebook or other social media sites. The future always remains to be seen, but with DEXs, DeFi is undoubtedly on the road to becoming more and more widespread.