## **What can you do with DeFi?** There's a decentralized alternative to most financial services. But Ethereum also creates opportunities for creating financial products that are completely new. This is an ever-growing list. - [Send money around the globe] - [Stream money around the globe] - [Access stable currencies] - [Borrow funds with collateral] - [Borrow without collateral] - [Start crypto savings] - [Trade tokens] - [Grow your portfolio] - [Fund your ideas] - [Buy insurance] - [Manage your portfolio] ## **How can decentralized finance be applied?** DeFi enables wider global access to financial services. Aforementioned, anyone with an internet connection and a smartphone can access financial services in decentralized finance. Conversely, there are plenty of barriers that prevent access in the traditional system, mostly revolving around status, location and wealth. In DeFi, cross-border payments become affordable. Let’s take a look at the remittances market, in which overseas workers send billions of dollars across borders to support their families every year. Think of how much of transaction fees they face for doing this. Indeed, they are excessively high which eats into their modest income, not to mention it’s a time-consuming process. By cutting down intermediaries, DeFi services have the potential to slash these costs by more than 50%. This not only allows an employee to save more and be more productive, but it will also help support small businesses and economies on the other side of the world. Loans are another pain that can be addressed, thanks to DeFi. At present, it’s virtually impossible for the unbanked to borrow money, often because they lack credit records and history with a banking institution. DeFi platforms connect borrowers and lenders directly, eliminate credit checks, and enable digital assets to be collateralized. The structure of decentralized finance includes [stablecoins](https://www.hb-wallet.com/post/how-dai-stablecoin-works), a type of digital currency that stands to shield consumers against the volatility of crypto by being pegged to another asset such as dollars or gold. Within the constraints of the definition of decentralized finance given above, stablecoins that do not require a centralized, banking entity are the only tokens that are genuinely “decentralized”. If a stable token’s issuer such as Tether (USDC) can dictate the terms upon which a dollar redemption is made, it is not accurate to suggest that it is decentralized. Although [ERC-20 tokens](https://www.hb-wallet.com/post/2018/12/06/what-everybody-needs-to-know-about-tokens) that are backed by fiat currency can be used for the purpose of creating DeFi applications, the centralized nature of the custody of the assets backing those currencies makes it highly risky. In the scenario of [Basis](https://www.basis.io/) being stumbled and shut down abruptly due to regulatory concerns with its non-collateralized model, [MakerDAO](https://makerdao.com/)’s [Dai](https://www.hb-wallet.com/post/how-dai-stablecoin-works) has been able to capture the bulk of the markets and addressed the issues. Backed by Ether, [Dai](https://www.hb-wallet.com/post/how-dai-stablecoin-works) uses game theory and balanced economic incentives to sustain its value of $1, allowing the ability to transfer USD in any amount, instantly, across borders, without fees, without any interference. Most [decentralized exchanges](https://medium.com/@hannguyen94/everything-you-should-know-about-decentralized-exchange-dex-20ed6f098fe0?source=---------9------------------) and DeFi-oriented products in the market are now built on Dai.