Defi Introduction

Banking on the blockchain

The world of traditional finance is full of opportunities for investors, however the middleman will always take a cut. The banking industry makes profits for the services they provide, all of which can be provided in a decentralised ecosystem through peer-to-peer services which increases efficiency and transparency.

Let's look at the profit generating activities of the banks...

As you can see, many of the services that they banking industry provide are primed for a decentralised model. Many of these already exist as peer-to-peer services in the Defi space.

Advantages of Defi

Cutting out the middleman makes for a far more efficient system for the end user. Additional structural differences and advantages to DeFi include

  1. Unique products

  2. Faster pace of innovation

  3. Higher transparency

  4. More efficiency and lower cost cross-border payments


Lending and Borrowing

Defi has been instrumental in the development of peer-to-peer lending. Blockchain technology allows for contracts between two parties that do not require a middleman. DeFi enables a faster and easier verification process in lending and borrowing. DeFi also ensures safeguards for counter-parties in transactions as well as faster transaction settlement and better accessibility.

pageBorrowing and Lending: Aave


Projects like Ethereum allow for smart contracts which allows for the issuing of crypto tokens. Tokens exist as assets on the blockchain and provide a whole bunch of different uses. Some of these include property, art and many other assets. Think of it like digital shares of real world goods, all verified on the blockchain.



Immutability makes it nearly impossible to manipulate any record on the blockchain which means that the networks are secure.


This is the decentralised element of decentralised finance (Defi). This is what reduces the reliance on the middle man. Decentralisation provides greater access to individuals as well as providing increased simplicity; this would democratise the industry.

This quality would also lend itself to another factor that will help a lot with the innovation in the space and that is interoperability. Building these Defi apps on the same blockchain allows for them to interact with each other efficiently. A big advantage of this is that it leads to third party integration.

How do I get involved

Defi is an exciting space that is growing at an amazing pace year on year. We at Scallop are excited to be developing products that provide many of the advantages of Defi with the familiarity and security of everyday banking accounts. Defi is limited to the digital sphere and with the Scallop payment cards being released in May 2022, you will be able to reap the benefits of Defi innovations with the convenience of an everyday payment card. Join the waitlist for your free debit card today!

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