Benefits and Challenges of Decentralised Finance

Benefits and Challenges of Decentralised Finance

Decentralised finance, or "DeFi", refers to the concept of providing financial services without involving intermediaries. In the last video of this five-part video series, James explains what DeFi is and the main potential downside of DeFi.
Overview

Decentralised finance, or “DeFi”, refers to the concept of providing financial services without involving intermediaries. The lack of an intermediary has advantages, for example in terms of being more robust as a platform if it avoids solvency risk on the intermediary, and disadvantages, the main issue being not having a single entity able to stop bad actors. Steps can be taken to mitigate against bad actors in a DeFi project, however taking these may effectively involve reinstating some kind of central authority, and so undermine the DeFi nature of the model.

Key learning objectives:

  • What is DeFi?

  • What is main potential downside of DeFi?

  • How are the potential downsides of DeFi mitigated against?

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Summary
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Expert
James Burnie

James Burnie

James Burnie is a partner at law firm gunnercooke. He has been at the forefront of advising on blockchain and cryptoassets projects, including the first equity issuance settled on-chain. His work is award winning, receiving runner-up at the Crypto A.M. Awards 2020, "Standout" at the FT Innovation in Legal Expertise Awards 2018 and "Highly Commended / Runner Up" at Legalweek: The British legal Awards 2017.

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