For people in trading environments, cryptocurrency has been a source of much disruption over the last decade. Decentralized finance (DeFi), in particular, is bringing about the creation of a more autonomous and transparent financial ecosystem. As blockchain tech continues to disrupt the trading markets, digital tools and assets are becoming ever more crucial for traders who want to stay abreast of all of the different markets, be they prop trading forex, commodities, or stocks.
The last decade has seen financial markets change in dramatic ways, largely due to new technological innovations, many of which can be attributed to cryptocurrency. In particular, decentralized finance (DeFi) and the normalization of digital assets through Web 3.0 are creating a future where the trading markets are more autonomous, accessible and transparent. Regardless of the specific market, be it in commodities, prop trading forex, or stocks, digital tools and assets are rising in commonality and popularity.
Why does DeFi matter?
To cut a long story short, many people are excited by the prospect of trading no longer being controlled by banks and intermediaries and languishing under unnecessary regulatory oversight. Decentralized finance will allow traders to trade with each other directly by using blockchain tech. The specific blockchain technology at work is something called a smart contract, which will autonomously fulfill itself once the criteria that both traders agree to are met. This type of trading removes the need for middlemen and a centralized authority in trading.
The online platforms that use DeFi concepts like decentralized exchanges (DEXs) have proven that the ideas behind DeFi can work. These exchanges show reduced costs, enhanced security and vastly increased liquidity. One of the main benefits that many individuals seek DeFi for is the 24/7 crypto trading and availability of financial services, as well as the ability to access these services from any location worldwide.
What digital assets are commonly used?
In the vast majority of cases, the digital assets that get traded are cryptocurrencies. Bitcoin, Ethereum and some other popular and long-established cryptocurrencies have proven themselves to be legitimate and trustworthy assets. Some of their strengths lie in the very same things we’ve already mentioned, such as their ability to be traded anywhere without interference from third parties.
Some other types of cryptocurrencies, called stablecoins, have also arisen lately and give traders the option to leverage a more stable trading option while still utilising the other benefits that blockchain tech offers. This is a perfect way for traders who don’t trust the stability of cryptocurrency to still be able to play in those markets.
Conclusion
The last decade has shown us that cryptocurrency, DeFi and blockchain technology are truly the future of some trading markets. As Web 3.0 becomes more accepted and blockchain technologies move further out of their nascency, it seems possible that trading digital assets will no longer seem strange and may even become the standard.
