The application on DeFi offers customers complete control over their money without mediators; there was no involvement from a third party to examine or evaluate; all decisions are made based on customers and predetermined conditions so is this the end of the bank yet?
Currently, the largest functions of DeFi are:
1. Creating monetary banking services such as stablecoin. Stablecoins peg on cryptocurrencies to non-crypto currencies, such as the U.S. dollar, aiming to bring price stability.
In fact, cryptocurrencies are sensitive and new consumers of the market might have to face a sharper price fluctuation than fiat.
2. Peer-to-peer lending and borrowing platform. It is popular among lenders to connect with borrowers of cryptocurrencies. Users can make money from interest for lending out their money. The Compound algorithmically is set for the interest rates.
3. Advance financial instruments such as DEX, tokenization platform, derivatives, and prediction markets. For Decentralized Exchange (DEX) is proposed for exchanging currencies from U.S. dollar to bitcoin or ether for DAI.
Prediction markets are more precise than the traditional polling method. It runs on Ethereum where users bet on an outcome of some event to make a profit out of it. For example the U.S. election.