Financial services are facilities that help you in some regard with your finances or money. Whether it’s a standard bank account, investment, mortgages, retirement funds or anything else, they all fall under financial services.
One of the most exciting parts of cryptocurrency at the moment is the rise of DeFi, also known as Decentralized Finance. DeFi is catching a lot of attention right now, mainly because it’s a very powerful use case for blockchain and cryptocurrency and it holds true to the core values of cryptocurrency and decentralization.
With DeFi you have total control over your assets and financial services, which is the entire point of cryptocurrency – removing middlemen and bringing freedom to money. The base service of DeFi is decentralized banking, which is what cryptocurrency allows. You have 24/7 access to your money and you can send it wherever, whenever you want.
DeFi offers numerous services and the ecosystem is always expanding. Most people don’t actually realize that one of the first DeFi services was the ability to tokenize real world assets. Now DeFi is hugely popular for peer-to-peer lending and borrowing. Crypto holders are able to lend their assets and earn impressive interest rates without having to deal with any middlemen.
One question that won’t go away though is how private is DeFi? Who can see what you’re up to and should they be able to? Does it matter?
Privacy is actually quite a controversial topic in general, both inside and outside of crypto. In our world here though, privacy has extra ramifications.
For starters, your blockchain wallet can be thought of just like your bank account. When you send money to a shop with a debit card, they can’t trace the transaction back to your bank and then view your bank account. They certainly can’t see how much money you have, where you’ve been spending it or any other similar details. But with cryptocurrency this is all technically possible. When you receive a payment you can check out the address it came from and see how much they have and what they’ve been up to.
The common retort is that if you have nothing to hide, privacy doesn’t matter. Which, when you really think about it, is completely untrue. A Canadian privacy expert David Flaherty famously said ‘If you have nothing to hide, then that quite literally means you are willing to let me photograph you naked? And I get full rights to that photograph—so I can show it to your neighbors?’.
It’s fair to say that most people don’t want their financial history open to all. That’s why privacy matters – and this certainly extends to DeFi. As the DeFi space grows, the need for private DeFi is increasing.
With private DeFi no one would be able to conduct chain analysis and find out who’s behind the transactions. Without private DeFi, experienced analysts could find out who’s lending, who’s borrowing, who’s earning a lot of money. This information being public could have dangerous ramifications for DeFi users.
Private DeFi solutions
Just like with the release of payment cryptocurrencies, private DeFi solutions are becoming available and gaining popularity but don’t quite have the same notoriety, although they do seem to be gaining traction.
Tixl has a private DeFi platform known as the Autobahn Network. The Autobahn Network is a Private DeFi Platform that can be used to tokenize assets and in the future will be used for privacy-focused DeFi applications.
What’s interesting about Tixl is their native token, MTXLT, which will be remanded to TXL. It can be transferred for zero-fees, thereby representing a true online version of cash. Furthermore, by using the Autobahn network and MTXLT, Bitcoin and other digital assets can be sent quickly and privately with low transaction fees.
By using a solution like Tixl, in the future people will be able to use DeFi apps that bring them the financial services they need in a decentralized manner while benefiting from the benefits of blockchain and remaining private.
Haven is an open source self-sustainable ecosystem of untraceable assets that enables users to anonymously exchange currencies and assets with complete privacy. Haven is based on Monero, which is how Haven enables all assets in the ecosystem to have complete privacy.
Kyber Privacy (pKyber) is a new privacy feature recently released by the privacy blockchain Incognito which allows users within the Kyber Network to trade anonymously. Using Incognito’s open-source technology anyone can enable anonymity for smart-contract based protocols with a simple integration.
The Daily Chain
*This article has been sponsored. The Daily Chain encourages you to carry out your own research before you make any form of investment and educate yourself about how to stay safe in the crypto space.