Is the age of middlemen coming to an end?
This is a question that advances in decentralized finance (DeFi) have recently proposed. With the growth of DeFi, users of this system of finance are increasingly discovering the benefits of peer-to-peer financial systems that are driving discussions around disintermediation.
The question then becomes, are we looking at a future of decentralized finance? One that allows us to invest into token shares, without the need for brokerages that charge fees for their expertise in legacy finance exchanges?
What are Token Shares and How do they Work?
This is the future that APYSwap proposes, by giving users the power to engage in the decentralized exchange of shares in tokenized vaults.
Now, that is a mouthful. What is a tokenized vault and how does one set one up?
It’s pretty simple, APYSwap allow users to create token vaults that, on the one hand, provide a financial service for other users, while also reaping the rewards that come with providing liquidity to a market. The beauty of this service is that it is truly peer-to-peer, it cuts out the middleman and the extra costs that come by association, maintaining true decentralization.
Users of the service can allow passive income to roll in. The owner of the vault becomes, in essence, a lender of shares, a portfolio manager, a brokerage, a bank in and of themselves.
The Benefits of Decentralization
Let’s put this another way. By engaging with decentralized token shares, users are mimicking the systems established by legacy finance, but without one centralized party that provides financial services. While loaning out your tokens, the whole process is permissionless, that means that there is no need to provide your identification, there is no need to provide your credit score, you can loan out tokens at any time of the day.
By comparison, if you were to buy shares from a broker or from the New York Stock Exchange, you’re dependent on a range of variables that have to do with the market, but also the human error that a middleman or intermediary presents. With DeFi, you are working faster, you are saving money, and time, and your transactions are fully transparent. The advantage of working within a decentralized financial system is that you, rather than a broker or agency, decide a range of variables, and every decision that you make is recorded in a decentralized ledge that is accountable.
Additionally, with the technology that is used for DeFi on blockchains open and permissionless, decentralized applications (dApps) and tokens can view these new features and apply them in their own dApps, thereby accelerating the progress to be made within this technology, and advancing the possibilities of DeFi.
A Peer to Peer, Permissionless System
This is the beauty of a decentralized system, by operating peer-to-peer, not only do users stand to gain rewards by making use of a token share system, they also provide a financial service to other users.
So, is the age of middlemen coming to an end? With advancements in technology accelerating the advancement of DeFi applications, and with the process of lending, providing financial services and gaining token rewards so simple, it’s hard to see why not.