Decentralized Finance, or Defi, has been a powerful force in the world for the last few years. While there can be multiple definitions of the term, it is widely agreed that decentralized finance stands in opposition to centralized finance. Some experts, however, disagree with this argument. Andre Cronje is best known for creating the yield aggregator Yearn Finance (YFI). Being a veteran software developer himself, he has seen the ins and outs of Defi from very close. Recently he took to Twitter to express his opinion on the term ‘decentralized finance’.
According to Cronje, Web3 finance or open finance is a much more accurate term. While Cronje did not elucidate his point on Twitter, experts summarize that decentralized finance was more of an idea than a reality. Many so-called decentralized exchanges are, in reality, quite centralized. As an alternative, web3 finance is much more suited since there is no ambiguity in that term. ‘Open finance’, on the other hand, is a much broader term that encompasses different aspects of Defi and beyond. While the debate regarding terminology may continue, no one is questioning the potential of the sector.
In recent times, Defi has gained a lot of political support. Senators in many parts of the world have spoken in favor of decentralized finance, and many feel that it will drive future innovations in the financial sector. How this model changes and adapts to changing situations will determine its long-term success.