Robinhood has faced some controversies for the past few months due to the restriction of traders’ accounts for purchasing GameStop and other stocks. These stocks were manipulated by a Reddit group’s increased activities, which planned on inflating the stocks’ prices to win a bet against wall street investors. The online brokerage firm restricted trading on the manipulated stocks when it noticed the strange activities.
The group of traders helped pump the stock prices to an impressive high with the 24-hours mark, which got the world’s attention. Some hedge funds like Mavin Capital lost a lot of nonet following Robinhood’s restriction to stop the trading activities. This has led to the US house committee inviting some parties related to the suspicious acts, like Robinhood, Reddit, and others.
Consumers went a decentralized system
It’s safe to note that both AMC and GameStop are now back on the public market, but the market manipulation might not be something that goes away soon. Interestingly, some attention has been diverted to DeFi, which means decentralization financial. Investors no longer want to face third parties that could stop transactions, which is typical for a centralized financial system.
People want a system that doesn’t require permission, which deals in a way similar to the decentralized finance system—the system which is well-known to blockchain products like Bitcoin and other digital assets. While DeFi might not look like much now, the financial system has many potentials and could change the world’s financial outlook.
The system is usually on a public blockchain like the Ethereum network and offers numerous financial services alongside their smart contract features. While DeFi could be anything in the financial system, what makes them different is their decentralization, which gives people autonomy over their money. DeFi could take over the financial world due to accessibility and transparency.
These features would likely make the sector offer better services to users and improve the available ones. The decentralized system offers asset management, insurance, payments, and other parts of the ecosystem.
Features of DeFi
This is a huge improvement from the primary financial system that offers no autonomy to account holders, meaning that they have no control without getting permission from the banks. This gives holders impeccable access with just their DeFi platforms. Users can create accounts, makes transactions without facing issues or interferences from third parties.
These users wouldn’t go through delay periods or time-wasting KYC procedures before accessing accounts and making transactions. The decentralized finance system offers fast and seamless transaction processes from top to bottom.
With the new system, deposits and withdrawals are seamless and without too many hassles as the sector hopes to improve the traditional system and the numerous time-wasting factors. Apart from accessibility, transparency is also a notable feature of the DeFi system. It gives all users the ability to check activities in real-time and check how their transaction goes and come.
Gone are the days when customers won’t see how their money and accounts are managed and how transactions are processed. DeFi is paving the way for more advancement in the world’s financial system processes.
