Today’s financial system is full of third parties in charge of all the financial transactions you make.
Suppose you want to buy a computer and make the payment to the store owner. The amount won’t be transferred directly to the store owner. The sender’s bank account will initiate the transactions, debit the amount, and transfer the amount to the receipt bank.
These third parties also charge a hefty fee for using their services.
What about having a decentralized financial system that not only eliminates the need for intermediaries but also processes high transaction throughputs at no or ultra-low fees? This can be accomplished with Defi app development.
According to Emergen Research, the global Defi platform was valued at 13.01 billion in 2020, and with a CAGR of 43.8%, the market is expected to reach 507.92 billion by the year 2028.
This article will help you move toward your journey of building a Defi app after making you familiar with what a Defi app is, how Defi works and what the future holds for Defi.
What is a Defi App?
Decentralized Finance (Defi) is an emerging financial infrastructure that eliminates the need for third parties to approve transactions, including government bodies and interference forms.
Instead of intermediaries, Defi relies on the immutable, decentralized ledger known as blockchain upon which the world’s first cryptocurrency name Bitcoin was also built.
Blockchain enables the Defi to run on a network of computers instead of a single server, unlike today’s financial apps.
Decentralized finance will not only facilitate peer-to-peer payments but also revolutionize the process of borrowing and lending in addition to a variety of other financial activities.
How Does Defi App Work?
How does a Defi app work? This is what you need to know before involving yourself in decentralized finance app development.
As said, decentralized finance is based on blockchain technology, which ensures that all the financial information is stored over a network of the computer rather than a single server.
Defi app makes use of cryptocurrencies and smart contracts to eliminate the need for third parties to facilitate peer-to-peer transactions.
The following example will help you understand the working of Defi more precisely.
Aqru is one of the best Defi yield apps which allows people to earn interest on their holding of cryptocurrency assets like Bitcoin.
Aqura doesn’t need the support of any third-party like government bodies or financial institutions to carry forward cryptocurrency trading on the app.
On this Defi app, people can deposit their cryptocurrencies or real money using debit or credit cards as a payment method with no additional fee.
The app will be paid interest to the user on a daily basis. Whenever the user wants to withdraw, with 24 hours of notice they can withdraw their earnings either in a bank account or crypto.
This is how the Defi app works.
What Future Holds for Decentralized Finance?
Nowadays whether it is in the financial sector or any other, people prefer to have more control of everything they do without losing sight of security.
This is one of the reasons why the popularity of decentralized finance apps has exploded. But how big Defi space is expected to grow in the future?
The following Defi market Statistics will help you make a picture of decentralized finance apps in the future:
- The Defi market is expected to grow at a CAGR of 8% during the forecast period of 2022-2028. (Emergen Research)
- As of February 2022, the Defi market size was valued at 106 billion, up from 72 billion in February 2021. (Yahoo Finance)
- Around 6 million people among which 1.36 million people come from unique addresses have used Defi services in their lives. (Deftimes)
- Global fintech companies like Robinhood, Revolut, Square and many others are expected to make their debut in the decentralized finance space. Their debut will fuel the growth of Defi apps and their users.
- Cryptocurrencies will be adopted globally in the upcoming by considering their current peace of growth. This increased adoption is expected to force central bodies and governments to shift to Defi to stay pertinent in the future.
How to Build a Defi App?
Since this is a new thing and people are not familiar with it, creating a Defi app is a complicated process for many of us. The following guide will serve as a great help to you to support your vision of Defi app development.
1. Token Economies
Having a comprehensive knowledge of the Defi project is a must to lead your project to success. You should have a clear understanding of the problem with Defi app development you intended to solve.
As the next step, you need to find the name for your token, symbol, or any other information that can be used to establish the identity of your token. This step is expected to consume a huge part of your time as token economies are going to decide how your token will work.
As said, Defi apps are based on the blockchain network, therefore you need to choose the blockchain on which the development process will steer. As per the current scenario, Ethereum and Binance Smart Chain are the two most popular blockchain platforms. However, you should not limit your selection to Ethereum and Binance only, there are other blockchain platforms also available such as Tron. You should explore all the options available to you and choose the one that best aligns with your requirements and has the potential to deliver unparalleled results.
Revise your decentralized finance app development goals again and haven’t left any scope for misunderstanding and clear knowledge of the blockchain platform selection.
2. Work on the Creation of Smart Contracts
The smart contract can be termed as a set of rules that will define how your Defi app will work. Also creating a smart contract on the blockchain network will automate your app operations without human interventions.
While creating the smart contract, Defi app developers are required to ensure the following:
- It is essential for a smart contract that it can be sent to different addresses without any complications.
- Whenever a transaction is invoked the token should be notified to the Defi wallet.
- You also need to define the transaction fee in the smart contract to ensure continuous revenue from the Defi platform.
- The smart contract should be capable enough to securely store and manage tokens.
- Smart contact is also responsible for the token migration process therefore, the smart contract also needs to offer easy and flawless migration.
3. UI/UX Design
This is one of the important steps in Defi project development. Pay utmost attention to the UI/UX part, since this is the first part your users are going about your Defi app development project. The design should be visually appealing and clutter-free to ensure a smooth user experience for a better customer retention rate.
4. Testing and Deployment
In the final step, test every function of the Defi you have developed. You can ask the help from quality analysts to get more precise results. When you are confirmed that the Defi app is free from all errors you can deploy your application to your users.
Develop Your Defi App With Experts
After reading all of the above-mentioned information, one thing can be said decentralized finance is the new future. If you are planning to invest in the decentralized finance space, then this is the right time to do so. However, we advise you not to make any hustle and to do proper research to land a successful Defi project that can bring huge revenue.
Once you have the Defi app development idea in your mind, the next thing you have to do is pick the right decentralized application development company in India. Take a look at the portfolio, and client reviews of the company also ensure to choose a company that has relevant experience in blockchain app development.
Konstant Infosolutions is one of the great recommendations for Defi app development. The company has expertise in Defi, NFT development, and a variety of other blockchain development services.
FAQs
What are Defi app ideas?
- Decentralized exchange (DEX) development
- Non-fungible token (NFT) development
- Decentralized insurance platform
- Crypto Defi wallet
How much does it cost to develop a Defi app?
As you know every app development project is not the same. There are a variety of differences such as features, platforms, features, and so forth. The same thing also applies to Defi app development. Therefore, it is impractical to provide you with an estimated cost of Defi app development. Have a consultation with Defi app development regarding the precise estimation.