In recent months, we have also been talking more and more about DeFi (Decentralized Finance). It’s an explosively developing market, even if the current bitcoin rally is a bit distracting from it. DeFi seems to be making a big difference not only in finance but also in other industries . But what effect does it have on trade?
DeFi in online commerce
The connection between DeFi and trade is interesting simply because we are facing unprecedented difficulties in trade for decades, and the coronavirus has had a negative effect here as well. Of course, it may seem like a great solution to get through the crisis at first, if merchants can confidently turn to e-commerce giants like Amazon, Shopify, or Ebay, but in practice, unfortunately, it’s not that simple. These platforms often ask for a 15-20% commission, which further reduces the already low profits of traders. Anyone who still decides to sell their products in such a large webshop often bridges the problem of high commissions by raising the price, thereby passing on to the buyer the extra costs associated with the partner.
Currently, there are attempts to the block chain solve problems caused by the centralized models using, this can help the Defi, because the whole point is precisely to highlight the central third operator in a complex financial process, who is standing on the two sides in trying to control things as well as increase costs. If DeFi could be used to establish a direct, direct link between traders and their customers, everyone involved could do well.
Decentralized finances and loyalty schemes
Loyalty schemes are also widespread in many countries, we can get loyalty points, tokens, credits from many companies in exchange for our regular purchases, of course with the aim of encouraging us to make more purchases.
One of the problems with these systems is that almost every company has its own loyalty system, so we have no choice but to register for each one separately, even if we shop regularly in several different places. This is inconvenient, moreover, it is not effective, as it is easy for customers to give up the options, they just don't have to deal with more and more registrations, administration and plastic cards.
With the help of DeFi, loyalty systems could become simpler and more transparent, as it would allow the customer to use only one address and receive their loyalty points from each company. A smart contract would make it possible that although there are several different organizations, the buyer still gets their points in a uniform, orderly way, wherever they shop. In addition, with DeFi, international, cross-border loyalty schemes would be easily feasible, as, as with cryptocurrencies, geographic borders are irrelevant in a decentralized application.
Smart contract, smart shopping
There are already DeFi systems that automatically create tokens with each purchase. These, of course, are delivered to the buyer so that you can use them on your next purchase. The system is operated by smart contracts. The platform, known as Uquid, is one of the first players in the collaboration between e-commerce and DeFi. Uquid, one of the biggest digital shop for crypto user is also accepting cryptocurrencies like Bitcoin Cash (BCH) for payments. We can buy various digital products in their constantly expanding webshop.
DeFi has a long way to go in trading
We can see that there are already initiatives, but there is still a very long way to go for DeFi to play a general role in trade. One of the reasons for this is that the use and acceptance of cryptocurrencies is essential for this, but this is difficult even for now, even if PayPal has already been in the area. In addition, just as with the previous card payment system, it is difficult to convince merchants that these devices create value for them.
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I find your article very interesting. Now, a market semi paralyzed by a pandemic originated by a virus that apparently came to stay, I think that the adaptation must be multiple. From what I read, I will never go back to a crowded shopping mall. Then the internet market will have a great advantage.
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