How DeFi Helps Businesses Innovate More Efficiently

As decentralised finance (DeFi) continues to grow, so do its advantages over traditional business structures. DeFi is helping solve some of the biggest challenges that businesses face today. Not only has it improved traditional finance practices (like lending and borrowing), but it has introduced several new concepts to the playing field that benefit consumers and businesses alike.

Take smart contracts, for example. They’re self-executing by nature and require no intermediaries to intervene. In turn, they save a significant amount of time and money. Businesses reap the benefits by automating things like the invoicing process and can pass their savings onto customers.

In this article, we will explore five of the biggest ways DeFi will help revolutionise businesses all over the globe.

Quick and uncomplicated solutions

The COVID-19 pandemic has certainly helped advance the online economy. With more people staying at home to avoid getting sick, there has been a surge in online sales.

Now, with DeFi capabilities on the table, transactions are more secure and transparent since there is no need for the intervention of a middleman. Fintech (financial technology) companies such as SG Veteris have begun exploring ways to make crypto payments and transactions easier for the average person to navigate.

For example, many organizations are increasingly taking advantage of third-party platforms such as Bitpace, which can easily be customized and integrated into existing systems to provide more customer choice by offering the option to pay for goods and services in crypto.

The many benefits include safety and security as blockchain technology makes transactions impossible to manipulate and reduces the threat of identity theft and hacking. There are also no transactions fees or chargeback costs to pay because virtual funds don’t go through a bank and because crypto is a universal currency and is not linked to a specific country or subject to local restrictions or local taxes or interest rates, cross-border trade is easy.

New ways to borrow and lend money

Borrowing and lending protocols are all the rage in DeFi. Small to medium-sized businesses often struggle to secure traditional bank loans. Fortunately, many of those same businesses can find relief on the blockchain. In fact, it’s a great option for areas like Africa and India that lack a reliable, centralized banking system.

Effective risk management

Decentralization has introduced some incredibly effective risk management and analytics tools so depositors can be confident in what they do with their funds. With the new methods of analyzing data, businesses can make informed decisions and establish effective risk management plans.

Supply chain management

Effectively managing a supply chain has been a challenge for decades. From processing materials, tracking them, verifying their authenticity, and keeping up with consumer demand, any supply chain is going to have several “cracks.”

Many suppliers have now turned to the blockchain to alleviate their stress. Automation makes processes much quicker, and goods can be delivered to consumers more efficiently.

Maintaining a competitive edge

Overall, DeFi is a surefire way to maintain a competitive advantage in ever-changing markets. From keeping up with competitors and the latest consumer trends to cutting costs and reaching new markets, businesses can find exceptional value within the blockchain.

The most prominent invaluable aspect, however, is its ability to improve the consumer experience. Take non-fungible tokens (NFTs) for instance. Consumers now use them as tickets and memorabilia. That means no fading, tearing, or falling apart when wet. That’s just one example of the value that NFTs bring. They’re also used for gaming, luxury goods, and real estate.

All in all, if your business is looking to innovate, DeFi could very well be the solution you’re looking for.