The global financial crisis of 2008 is considered to be one of the greatest financial crises of all time. In addition to the long-term effects of the crisis, reference is still often made to the sequence of events that led to the crash. In retrospect, however, only one thing is really important; the financial institutions have failed, and not just that the governments were complicit in making the situation worse.
Yet in the midst of the crisis, incredible seeds were sown that would transform finance as we knew it. Back then, Bitcoin’s anonymous founder Satoshi Nakamoto proposed a new financial system through the Bitcoin whitepaper, and although Bitcoin didn’t gain popularity until a few years later, its impact on finances has been undeniable ever since.
In the past few years, Bitcoin and other cryptocurrencies have made headlines in almost all financial circles, developing and developing practical use cases such as decentralized finance.
The inadequacies of existing financing models.
Fiat currencies date back to the 12th century in China, but they did not become popular until the 20th century, and while it is undeniable that the fiat system has been effective worldwide for over a century, the shortcomings are its centralized nature day by day more worrying.
Originally, it was mandatory for fiat currencies such as the US dollar to be backed by gold, silver or other precious metal reserves. However, funding has shifted massively and such a reserve is no longer necessary in many countries.
As a result, a store of value originally tied to precious metals has evolved over decades into a medium for importing and exporting supplies, automobiles, crude oil, military weapons, and any other asset you can name. These assets generally contribute to a country’s currency reserve and how much purchasing power a currency should hold.
However, as has been observed over the years, central banks and governments are not always transparent about foreign exchange reserves and money pressures. In some cases, central banks try to print and circulate more money than they should (given the depletion of foreign exchange reserves), leading to hyperinflation and eventually a recession.
This has happened all over the world. Hence, it is undeniable that fiat currencies and the monetary system have centralization gaps, weaknesses due to the great power that lies in the hands of small groups. While the Fiat cannot be replaced at the moment, that does not mean that certain alternatives cannot improve it.
Decentralized financing: an emerging financial alternative
Decentralized Finance (DeFi), or Open Finance as it is sometimes called, is a blockchain-based alternative financial ecosystem. DeFi is not only independent of the influence of governments and central banks, but in many cases of all third parties and forms of financial intermediaries.
In essence, DeFi Banking is the Unbanked and Underbanked, without walls and with numerous tools for generating income such as yield farming.
You could say that the Ethereum network and smart contracts are responsible for the birth of DeFi. Smart contracts are computer-generated transaction logs that run automatically when certain preset conditions are met.
Of course, DeFi has not only grown on Ethereum since then, but also on various blockchains that have developed their own approaches to capture the decentralized flow of value. At the moment that’s not a small amount. The total value locked in DeFi is more than $ 65 billion at the time of writing.
Wault Funding: Community Driven DeFi Protocol.
Wault Finance is a fully decentralized, community-owned DeFi protocol that advocates organic growth and a sustainable financial model. Wault’s dedication to its users has been rewarded from the ground up with massive growth and total project value of $ 400 million at the time of writing, which has not received any venture capital investment since launching in early 2021.
The decentralized exchange of Wault Swap (DEX) is a real cross-chain DEX in both the Polygon and the Binance Smart Chain (BSC) network. With the lowest fees for Polygon and BSC (0.2%), the exchange is completely decentralized and has continued to attract swarms of users within a short period of time. The non-custody DEX now has one of the largest trading volumes in both chains and is consistently among the top 5.
Wault use cases and the solutions for the existing ecosystem
While many new DeFi protocols and projects have been blamed for lack of utility and rug pulling, Wault has a wide range of legitimate financial instruments, with products like DEX Wault Swap, Wault Launchpad, and Wault Locker, all of which are decentralized tools that users can use use to earn, store and secure their crypto assets.
Most recently, Wault announced the launch of the first stablecoin model of its kind, a trade-based stablecoin WUSD.
Stablecoins have often played a pivotal role in DeFi and the cryptocurrency market as a whole, and while there are many of them, there have been a number of flaws and gaps in their models. Wault aims to address some of these loopholes by using the guarantee of active trading within the Wault ecosystem as support for WUSD. You can read more about the stablecoin model here.
For DeFi Maxis and enthusiasts, the goal is for the entire ecosystem to become large enough to be an alternative to failing centralized systems. In such a short amount of time, Wault’s commitment to community growth and decentralized products would suggest that their platform is sure to play a huge role in developing that vision and spreading decentralized finance among the masses.
Disclaimer: This is a paid post and should not be treated as news / advice.