Nowadays, DeFi has become a real buzzword in the finance world. According to Grand View Research, the global decentralized finance market size reached $11.78 billion in 2021 and is forecasted to increase at a CAGR of 42.5% from 2022 to 2030. The driving factors for the Defi market growth include the increased demand for decentralized applications that helps streamline business processes.
Decentralized finance (DeFi) applications are built on blockchain platforms and are used to manage money without central intermediaries like banks or brokerages. Moreover, DeFi offers easy access to lending, borrowing, and trading platforms that are secure, transparent, and trustless.
As the demand for DeFi dApps is constantly growing, an increasing number of businesses are looking for various ways to enter this market and take their business to a new level. And if you are one of those businesses and want to learn the benefits of DeFi dApp development, this blog post is for you. So let’s get started.
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Benefits of DeFi dApp development to advance your business
Undoubtedly, dApps have a lot to offer businesses. Below are some of the key benefits that your business can get by developing a DeFi dApp.
1. Improved security
There is no doubt that decentralized dApp development services have revolutionized the way we do business by providing enhanced security. Unlike traditional finance apps, DeFi applications are built on decentralized platforms like Ethereum that use blockchain technology. This means that all the transactional data is stored on a distributed ledger that is immutable and transparent. So, it becomes nearly impossible for unauthorized parties to access or tamper with financial data.
2. Greater transparency
As a financial business, you must be well aware of the importance of transparency. dApps offer a high level of transparency as all the transactional data is stored in a public blockchain. In this way, all the stakeholders can view the data and transaction history at any time from anywhere. Moreover, smart contracts can further increase the transparency of transactions as they automate the process and eliminate any need for manual intervention. For example, Nexus Mutual is a decentralized insurance platform that uses smart contracts to provide greater transparency to its users.
3. Fault tolerance
As a business owner, you know how important it is for you to have a robust and fault-tolerant system. To overcome this issue, DeFi dApps are built on decentralized platforms that help recover from a wide range of issues like power failures, human errors, and hardware problems. At the same time, using consensus protocols like Proof -Of-Work (PoW) and Proof-of-Stake (PoS), these platforms ensure that the system is not vulnerable to a single point of failure.
4. Cost-effective
Whether you are a startup or a large enterprise, you always look for ways to reduce costs so that you can increase your profits. With DeFi applications, financial institutions can save a significant amount of money as they don’t have to rely on third-party service providers. For instance, MakerDAO is a decentralized lending platform that enables users to lend and borrow cryptocurrencies without the need for a bank. This not only helps save money but also reduces the time required for transactions. As blockchain transactions are fast, it further helps reduce the overall cost.
5. Autonomy
In the traditional financial system, businesses have to rely on central authorities like banks and government organizations. However, with decentralized finance applications, businesses can enjoy a high degree of autonomy as they don’t have to depend on any third party. This makes the entire system more efficient and streamlined. Moreover, it also helps reduce any financial forgery in the system.
6. Greater flexibility
With businesses moving at a fast pace, they need a financial system that can keep up with their pace. Decentralized applications offer greater flexibility to businesses as they can be easily integrated into the existing business system. For instance, 0x is a decentralized exchange that allows users to trade a wide range of assets in a flexible and convenient manner. This way, enterprises can quickly adapt to the ever-changing needs of the market.
Now that you know about the various benefits of DeFi dApps, it’s time to learn about how to make money on your dApp.
In-app purchases
One of the most common ways to make money from a dApp is through in-app purchases. If a user want to use a certain feature or service, they can pay for it with in-app tokens. This way, you can provide them with a seamless experience while also generating revenue for your business.
Subscriptions
Subscriptions are another way to earn money from a dApp. As this will allow your app users to have a subscription to that particular service or a feature for a certain period of time which they are craving for. In return, you can charge them a monthly or yearly fee.
Advertising
Advertising is another popular way to monetize. While using an advertising network, you can display relevant ads for your users based on their search history and earn revenue from them. This will act as a recurring revenue model that can help generate a steady flow of income for your business.
Pay per action
Pay-per-action is a great monetization model in which you can charge users for taking a certain action on your app. For instance, you can charge them for every transaction they make or every message they send.
Free trial
Another way to make money from decentralized applications is by offering a free trial. This will help your business to acquire new users who can then be converted into paying customers.
Apart from the above methods, there are many other ways to generate revenue from a dApp. So, it’s up to you to select the one that suits your business model.
Final thoughts
Defi dApps offer a wide range of benefits to businesses, which is why they are gaining popularity at a rapid pace. With their help, enterprises can save money, enjoy greater autonomy, and have a more flexible financial system. If you’re looking for ways to generate revenue from your dApp, then consider in-app purchases, subscriptions, advertising, pay-per-action, or free trials. Please choose the one that is best for your business needs and start reaping its benefits.