Web 3.0 technologies have several use cases in various industries. Some of these Uses Cases of Web3 in the Real World by enterprises are deeply analyzed below.
Decentralized finance (DeFi):
DeFi is a Web 3.0 technology that is increasing in cryptocurrencies and Blockchain technology industries, which enables decentralized financial applications that include decentralized exchanges, asset management platforms, and lending platforms, which are the keys components of DeFi; these are using smart contracts to automate transactions without any intermediaries needs.
DeFi is generated from Web 3.0 technologies to create a more open, transparent transaction and accessible financial system without centralized control or intermediaries.
Decentralized exchanges (DEXs)
This technology of Decentralized Exchanges are exchanges of different crypto networks that can function without any control of a centralized authority or intermediaries. Still, trading is executed through a Decentralized network of nodes that verify transactions and compel the rules of exchange in the system.
The most common type of decentralized exchange is an automated market maker (AMM). This kind of exchange uses Smart contracts to execute trades between different cryptocurrencies. Users can trade their tokens by providing liquidity to the exchange’s liquidity pools. The exchanger now uses this liquidity to match buyer and seller with a determined price agreed by the trades with an algorithm that considers the ratio of tokens in the liquidity pool. Some examples of these decentralized exchanges include PancakeSwap, Uniswap, Sushiswap, and many others.
Lending platforms in the DeFi ecosystem are Web 3.0 technologies that enable users to lend and borrow cryptocurrency without needing a traditional financial intermediary that might take some time before it manifests. These platforms use smart contracts to automatically execute lending and borrowing transactions between users almost immediately after documentation.
This advanced technology allows users to earn interest by providing liquidity to the lending platform, which is also lent out to some users who need liquidity to borrow for trades and others in cryptocurrency. The supply and demand for each cryptocurrency on the lending platform determine the Interest rates.
Some popular lending platforms in the DeFi ecosystem include Compound, Aave, and MakerDAO.
Asset management platforms
Asset management platforms are one of the DeFi ecosystems that allow users to manage their cryptocurrency assets through automated investment strategies. These Web 3.0 technology platforms use smart contracts to execute investment strategies based on predefined rules and parameters.
Users usually choose from various investment strategy companies, such as index funds or algorithmic trading bots, and allocate their cryptocurrency assets accordingly. The platform then executes the investment strategy automatically, without manual intervention.
Some popular asset management platforms are Balancer, Yearn Finance, and Set Protocol.
Benefits of Decentralized Finance (DeFi)
One of the significant benefits of DeFi is its openness and accessibility, unlike most traditional financial system, which is controlled by centralized authorities and intermediaries. DeFi is made available for everyone with an internet connection. This technology makes it a more inclusive financial system which is accessible to everyone around the world, regardless of their location and financial status.
Also, another benefit of DeFi technology is its transparency and security. The reason is that their transactions are recorded on a public Blockchain. These transactions are transparent and easily auditable. This technology reduces the risk of fraud and corruption because every transaction is traceable and visible with a unique transaction identification to everyone on the network. For this reason, it is complicated to manipulate or hack because the network’s consensus mechanism secures the transactions.
DeFi gave users a convenient means of controlling their financial assets. Because transactions are executed automatically through smart contracts, it brings more confidence to users.