Finance

Earnity’s Dan Schatt and Domenic Carosa Regard DeFi’s Scalability and Accessibility as Key Advantages

For starters, decentralized finance, or DeFi, is a surfacing financial technology founded on secure distributed ledgers like those that facilitate cryptocurrencies. Dan Schatt and Domenic Carosa, the two cofounders of DeFi startup Earnity, are quick to indicate that the decentralized financial technology rids banks and financial institutions of the authority over money, services, and products. According to Schatt and Carosa, DeFi is incredibly beneficial for consumers as it removes fees required by banks and other financial institutions for their services. It holds an individual’s money in a safe digital wallet rather than enlisting the service of banks to keep it. In addition, any individual with an internet connection can access DeFi without the need for third-party approval and transferring funds would also be much faster, taking from between a few seconds to a few minutes.

As Earnity’s Dan Schatt and Domenic Carosa point out, one of the reasons decentralized finance is attractive to consumers is that its financial transactions don’t require third parties. In contrast, DeFi uses components such as software, hardware, and stablecoins that promote the creation of applications. They do mention, however, that potential users might need to wait as infrastructure and regulations are still being developed.

In mid-2020, DeFi expanded significantly, growing from $10 billion to almost $100 billion in October 2021. The increase in user adoption can be credited to trends such as globalization, digitization, and declining trust in centralized organizations, explain Earnity’s Dan Schatt and Domenic Carosa. Some DeFi products share traits similar to traditional finance. However, there are products unique to the technology, such as being almost wholly decentralized, which means there is no need for brokers, insurers, banks, transaction fees, and interest rates.

Decentralized finance carries the potential for disruption and adoption in current financial systems. The innovations in the platform display a compelling use case for cryptocurrency and blockchain technologies that promote market valuations for the products and assets in the future.