XEND FINANCE OR THE BANK?
This is an article comparing traditional finance in the banking system with decentralized finance on blockchain using five factors and Xend Finance as a case study.
AUTHORIZATION
Xend finance is a credit union decentralized finance protocol leveraging on smart contract programs to provide seamless lending, borrowing and savings operations with a decentralized approach where the users are in charge and are responsible for their actions on the platform. Xend finance will run as a decentralized autonomous organization governed by its users who can make proposals and vote.
The bank on the other hand, is a centralized entity that is controlled by the apex bank of wherever it is situated according to the financial laws and regulations of its geographical location and government. This hierarchy places the customers beneath, in the last place making them having to go through consequences of decisions made by the financial institutions and regulatory bodies whether favorable or not without having a say.
CONTROL
Using xend finance, you have access to all your funds anytime and anywhere with the full authority to control them, making transactions on the blockchain transparently with personal records that cannot be erased and manipulated ever.
Using a bank, you don’t have access to all your money as there are limits according to regulation and account threshold based on account activity. Access to your money is influenced by the condition of the bank as at when you need it. These conditions can be operating time, availability of fiat, network stability/fluctuation and more. Bank records can also be manipulated and have to be requested for periodically.
SECURITY
Security is one of the key issues blockchain has solved to eliminate trust issues due to how blockchain networks are distributed and run across many parts of the world by nodes that connect to the network being run nonstop and agree based on cryptographic verifiable timestamp, blocks and block height. Xend finance is building on blockchain that gives it the advantage of a new security layer that cannot be comprised as far as the liveliness of the blockchain network is maintained.
Traditional banking systems having integrated digital payment and transfer using web services and hosts, have been faced with high number of cases on security breach leading to account hacks and unsolicited transfer of funds from a customer’s account into another without the bank suspecting, leading to lack of trust of the banking service. This problem keeps rising as measures been taken to counter them are been developed.
INTEREST RATE
Xend finance will give credit union savings participants up to 15% APR.
Banks these days give around 2% to 4% APR% on savings which amount to zero or a negative interest rate at the end of the year because of charges and fees deducted from user’s accounts.
INSURANCE
Blockchain defi protocols either integrate insurance defi protocols to cover the downside of its user’s investment or create insurance funds to compensate its users fully in the case of any loss caused by the project and not the users. Xend finance will provide decentralized insurance to protect assets and investment of its users as seen on the website.
Banks have a deposit insurance policy that cover its customers but it only returns a given amount according to regulatory policy no matter how huge the loss is.
https://xend.finance
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https://t.me/xendFinance