Whether it’s due to geographical location, trading limits, or a lack of access, investing is far from a level playing field. This is especially the case in centralized investing, which has notoriously used sanctioning to bar whole geographical regions from investing in certain locations or stocks.
While DeFi (decentralized finance) has allowed for many of these impediments to be overcome, it still traditionally lacked access routes for DeFi users to invest in the stock market. Commonly, those using DeFi are able to invest in cryptocurrency but are restricted from using dApps to access the stock exchange.
At least, this was the case until DeFiChain released its decentralized assets. In this article, we’ll be discussing common impediments that investors are likely to run into and exploring how DeFiChain overcomes them. With DeFiChain, investing has never been more accessible.
What impedes everyday investors?
When it comes to creating successful investing accounts, there are two main strategies that people seek: diversification and access. A portfolio that’s only filled with one industry or asset type is vulnerable to a sudden change in the market. Additionally, if a user is located in a certain place, they want to be able to get access to international stocks to feed into the first point, diversification.
Yet, there are a few common problems that begin to impede everyday investors when they try and achieve diversification and access:
- Geographical restrictions – The country you’re based in has a direct impact on the access you have to stocks and the stock exchange in general. When seeking to invest, many countries simply do not have the infrastructure that allows their citizens to get involved. Similarly, if you’re in certain countries, major stock brokerage platforms will not allow you to create an account, barring you from starting your investing journey simply due to your geographical background.
- Trading limits – In 2021, the Securities and Exchange Commission (SEC) imposed direct restrictions upon the act of day trading on the stock market. Today trade, users must leave at least $25,000 in their trading accounts. If their account falls below this figure, their account will be suspended, and all other trades that they’re trying to initiate will be stopped. This severely impedes users that actively day trade, making this a pain for centralized financial systems.
- Out-of-reach assets – When users of DeFi systems want to buy traditional stocks or commodities, there is an elongated process for them to be able to do so. Instead of just outright buying the stocks, they must first transfer their crypto to fiat, withdraw the fiat to their bank, move those funds to an exchange platform and finally invest. This process can take several days, ruining the opportunity of investors to buy stocks at the prices that they desire.
Issues like these cause major frustration to investors from around the world, impeding them or completely preventing them from getting involved in the stock exchange. While many of these problems have now become normalized and get little attention from centralized systems, the world of DeFi is engineering itself to provide methods to help those falling victim to these platforms.
How does DeFiChain Help?
DeFiChain is a blockchain system that’s built to help users of DeFi get the most out of their accounts. Instead of impeding investments, DeFiChain’s decentralized assets make investing easier than ever. With a range of services, from staking and liquidity mining to decentralized loans and minting stock tokens against stable coins, investors can use this platform to get everything they need out of trading.
Let’s take a more detailed look at how DeFiChain combats the three most common issues that investors are likely to experience.
Overcoming geographical restrictions with DeFiChain
As DeFiChain is a decentralized blockchain, it exists outside of the legislation that centralized systems are tied to. While major international banks and governments impede trading due to geography, decentralized systems provide access to absolutely anyone.
This is achieved through two main strategies. First of all, decentralized systems are incredibly accessible. As these are online-based ecosystems, the only tool that users need to access them is a method of connecting to the internet. Even a smartphone will suffice, allowing billions of people across the globe to connect to DeFi.
What’s more, as DeFi is a system that runs on blockchain, it does not need state identity registration during any signup process. While when signing up for a bank, you’d be asked several questions about your identification numbers, name, address, and more, DeFi systems require virtually nothing. This means that anyone can start a financial account within the world of DeFi, not being restrained by personal factors.
These personal factors even extend to geographical location, with DeFiChain being a perfect example of a financial system that does not exclude based on country of residence. Within countries that have turbulent centralized systems, the movement to DeFi has been seen as a breath of fresh air. Countries like Venezuela see cryptocurrency and DeFi systems as a way to escape the corruption of their native currency.
By providing easy access for anyone, no matter their location, DeFiChain allows users to overcome the lottery of their country’s birth, being accepted into this decentralized system.
Overcoming Out of Reach Assets with DeFiChain
When attempting to access stock options, users of DeFi have to navigate through a time-consuming process of moving their money around different wallets and accounts. Not only does this impede users from getting stocks at the price that they want, but it also is incredibly frustrating due to the sheer number of steps involved.
DeFichian has a revolutionary system in place to overcome this frustration for DeFi users. Within their blockchain platform, they offer dTokens which directly mirror the movements of major stocks like Microsoft and Tesla. A user can exchange cryptocurrency directly for these dTokens, effectively bringing stocks, commodities, and indices directly into this DeFi ecosystem.
With this, users are instantly able to expand their investment portfolios, this innovation making DeFi investing a completely accessible experience, no matter what you want to invest in.
Currently, these dToken prices are trading at a slight premium when compared to the centralized stocks, but this will be resolved in the upcoming DeFiChain Improvement Proposal (DFIP), which is coming in the next few weeks.
Additionally, while centralized systems often only allow their users to buy a stock, with the investor then holding it until they decide to sell, DeFiChain offers further utility. With these dTokens, a user can then put their stocks into liquidity mining protocols. With this, they’re able to increase the amount of rewards that they’re getting from investing even more.
Instead of just waiting around and hoping that the stock the investor has bought will go up in value, this inventive system ensures that users are gaining a passive form of income the whole time that their stocks are within the liquidity pool.
DeFiChain is currently the only blockchain that is offering decentralized assets on Bitcoin. These dAssets are a revolutionary step, allowing for infinite expansion and further utility from stock token purchases. With just the click of the button, users of DeFi chain will have access to all of the stocks, indices, and commodities that they’ve been keeping an eye on.
Overcoming Trading Limits with DeFiChain
While users on centralized systems have to play by the rules of governing bodies like the Securities and Exchange Commission, those that use decentralized systems are playing a whole different ball game. By making a move to a blockchain system like DeFiChain, users are able to get access to trading without limits.
Instead of placing a cap on exchanging, buying, selling, or trading, DeFiChain creates a system in which everyone can trade whatever amount they would like.
DeFiChain takes this even further by providing their users access to buy stocks, represented as mirrored tokens. For example, a user could buy DFI tokens on any major exchange, send them to their wallets within DeFiChain, and then buy a DTSLA token. These stock reflections closely mirror the actual stock price, ensuring that users can access the stock exchange prices through a decentralized system.
DeFiChain is a striking example of how DeFi systems, with continual updates, innovations, and refining processes, are becoming the stronger financial system when compared to centralized investing. While traditional pathways of investing are impeded by geographical restrictions and trading limits, DeFi is free of these problems.
With DeFiChain, all of the assets that are normally available to investors are reachable, this system creating an accessible platform for investors to invest on. Their devolutionary dTokens are an exciting step toward a holistic system in which investors can diversify their portfolios while staying on the blockchain system.
While DeFiChain continues to progress, the creation and implementation of decentralized assets demonstrate just how revolutionary DeFi is shaping up to be in the modern world of investing.