DeFi Loan

DafriBank Digital DeFi Loans: Accessible to everyone

What is DeFi?

Decentralized finance (DeFi) enables anyone to lend, borrow, earn interest or take out insurance without a bank clerk rummaging through your income and expenses statements and demanding box-loads of documents. It uses a P2P network to establish decentralized applications that would enable everyone to connect and manage their assets regardless of their status and location. It provides an open-source, transparent, and secure financial service environment.

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Differences between DeFi Loans and Traditional Loans:

Decentralized Finance Traditional Finance
1. In decentralized finance, a public based ledger system of connected nodes acts as the trusted source, governing all operations in the financial sector 1. Public governance and existing administrative systems, which entails laws and licensed financial institutions, acts as the trusted source, governing all operations in traditional finance.
2. Decentralized finance continues to gain traction in part because it is open and transparent. There are no bounds in this system, anybody with programming skills can take part in building financial services and tools on top of public blockchains. 2. Cumbersome barriers to entry have made it improbable for the traditional finance system to embrace the emerging trend. The necessary condition that one must obtain proper licenses and authorization from regulators has restricted innovation around the traditional finance systems.

What is DafriBank Digital DeFi lending?

Through DeFi lending platforms DafriBank Digital aims to offer their customers loans without the hassle of intermediaries by using the concept of smart contracts and allow users to sign up on the platform for lending purposes.

A borrower can directly take a loan through the decentralized platform known as P2P lending based on the pre-determined terms of the contract that self-executes when the requirements of the contracts are met. Besides, the lending protocol allows the lender to earn interests.

DafriBank Digital uses blockchain technology for DeFi lending; it utilizes all its distinctive attributes and performs much better as compared to the traditional lending systems. DeFi lending offers absolute transparency with effortless access to assets for every money transfer process without involving any third centralized party. It provides a simple borrowing process where the borrower needs to create an account on the DafriBank Digital platform, has a digital wallet, and opens Smart contracts. DafriBank Digital provides a restriction-free environment, meaning there is no preferential treatment while ensuring immutability.

DafriBank Digital DeFi lending benefits both lenders and borrowers. It offers margin trading options, allows long-term investors to lend assets and earn higher interest rates. It will also allow customers to access fiat currency credit to borrow loans at lower rates.

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How do DafriDigital Bank DeFi loans work?

The DeFi Loans has major three parts :

1) Lending: Customer lends its cryptocurrency and earns interest and rewards every minute. The cryptocurrency is lent by the lender through smart contracts on which he earns interest.

2) Borrowing: Borrower who is in need of funds, deposits the collateral (no physical property is involved) which is more valuable than the loan amount, to get a loan.

3) Smart contracts: While the platform is decentralized so it prevents manipulation of processes and ensures that the lender’s assets are protected all the time and he receives the interest on time DeFi protocol ensures that the borrower should deposit collateral (in cryptocurrencies) using a smart contract. Only after the borrower pays back the loan, the smart contract distributes a part of the collateral to the lenders as interest payment and sends the remaining collateral back to the borrower.