Interoperability in DeFi refers to the ability of different blockchain networks and DeFi applications to seamlessly communicate and interact with each other. This characteristic is vital for the successful operation of the decentralized finance (DeFi) ecosystem, as it allows the exchange of value and information across diverse platforms, enhancing the efficiency, utility, and overall potential of the DeFi space.
Read everything you wanted to know about DeFi (Decentralized Finance). How does DeFi work, history of Defi, functions, data, technologies and blockchain.
Decentralized Finance (DeFi) signifies a substantial stride towards promoting financial inclusion. As a decentralized alternative to the traditional banking systems, it leverages blockchain technology to create transparent, open, and accessible financial services for everyone, regardless of geographical location or economic status.
The most important factors of DeFi compliance are: Know Your Customer (KYC) and Anti-Money Laundering (AML). These regulations are designed to prevent financial crimes like identity theft, fraud, and money laundering. KYC involves verifying the identity of customers and understanding their financial activities, while AML involves measures to detect and report suspicious activities.
One of the significant ways DeFi can drive social impact is through financial inclusion. Traditional banking systems often leave out a large portion of the global population due to reasons such as the lack of infrastructure, high costs, or stringent eligibility criteria. DeFi, with its open and accessible nature, can bridge this gap, providing access to financial services to the unbanked or underbanked populations.