# How Decentralized Finance can aid in the acquisition process Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-20 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: How DeFi Revolutionizes Traditional Finance Meta Description: Learn how DeFi empowers businesses with flexibility, security, and instantaneous transactions, offering a cheaper and more secure alternative to traditional URL: https://financedigest.com/how-decentralized-finance-can-aid-in-the-acquisition-processhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/defi-1736814992762-compressed.jpeg) ![DJ Qian, CEO of Chainge Finance](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/dj-qian-450x257-1736814992662-compressed.jpg) _By,_ **_DJ Qian,_** _CEO of_ [_Chainge Finance_](https://www.chainge.finance/) _’s, explains how financial technology can create more possibilities for businesses._ While decentralized finance is still a relatively new technology, the possibilities are limitless. Decentralized Finance, referred to as DeFi, is a global [financial technology which removes the need for traditional infrastructures such as banks](https://www.financedigest.com/why-banks-could-stand-to-learn-a-thing-or-two-about-financial-inclusion-from-fintechs.html "Why banks could stand to learn a thing or two about financial inclusion from fintechs"), intermediaries, or brokerage firms. It allows for users to act as their own [digital bank](https://www.financedigest.com/the-journey-towards-a-digital-bank-five-major-stages-to-successful-banking-digitalisation.html "THE JOURNEY TOWARDS A DIGITAL BANK – FIVE MAJOR STAGES TO SUCCESSFUL BANKING DIGITALISATION"), equalling a lot more freedom and flexibility in comparison to traditional finance. With businesses looking for more effective ways to [manage finances](https://www.financedigest.com/how-parents-can-help-students-manage-their-finances.html "How Parents Can Help Students Manage their Finances"), DeFi has been an effective solution. With the [recession looming](https://www.financedigest.com/analysis-euro-peers-over-the-cliff-at-dollar-parity-as-recession-looms.html "Analysis-Euro peers over the cliff at dollar parity as recession looms"), and businesses pivoting to change strategies during this time, the use for DeFi has been particularly relevant in the acquisition process. DeFi uses digital assets and blockchain [technology to empower users to conduct and manage their own financial](https://www.financedigest.com/how-financial-services-companies-can-successfully-utilise-low-code-and-no-code-technologies.html "How financial services companies can successfully utilise low-code and no-code technologies") operations. [Blockchain technology refers to a shared online public ledger](https://www.financedigest.com/blockchain-a-case-for-the-general-ledger.html "BLOCKCHAIN: A CASE FOR THE GENERAL LEDGER") which facilitates and tracks transactions within a network. This can be used personally, and also for businesses. The decentralized finance world is made up of a multitude of non-custodial [financial products](https://www.financedigest.com/50-of-consumers-wont-spend-more-than-20-minutes-applying-for-financial-products-online.html "50% of consumers won’t spend more than 20 minutes applying for financial products online"), built on the blockchain. ‘Non-custodial’ [means that project teams don’t manage](https://www.financedigest.com/senior-managers-regime-what-does-it-mean-for-the-industry.html "SENIOR MANAGERS REGIME – WHAT DOES IT MEAN FOR THE INDUSTRY?") your money on your behalf. Unlike, say, depositing your [money in a bank](https://www.financedigest.com/marketmind-banks-are-leaking-money.html "Marketmind: Banks are leaking money") or a centralized institution where clients lose custody of their assets. With DeFi protocols you always maintain ownership and control over your digital assets. **What can DeFi offer that centralized finance (CeFi) cannot?** Centralized finance can be [considered](https://www.financedigest.com/7-finance-career-options-to-consider-and-what-you-need-to-know-about-each.html "7 Finance Career Options to Consider and What You Need to Know About Each") a more traditional style of finance by some. While [CeFi can use blockchain](https://www.financedigest.com/binance-upgrades-blockchain-bridge-to-connect-defi-and-cefi.html "Binance Upgrades Blockchain Bridge to Connect DeFi and CeFi") tech, the infrastructure around asset ownership has been in place for decades. While this has served us well, it doesn’t take into account our modern needs, such as transparency, flexibility, speed, and security. What happens with your money is often unclear and once you’ve started using a CeFi product, your assets are, de facto, no longer your assets. They belong to the [centralized entity whom you’ve entrusted your assets](https://www.financedigest.com/u-s-to-move-3-5-billion-in-afghan-central-bank-assets-to-swiss-based-trust.html "U.S. to move .5 billion in Afghan central bank assets to Swiss-based trust") with. Thus, you are exposed to various risks from asset mismanagement to bankruptcy – cases in which access to your assets can be completely cut off at their discretion. The need for a third party, or a middleman, is integral to CeFI, however, not for DeFi. DeFi was designed with quick and instantaneous transactions in mind. While some CeFi products offer this, DeFi can completely remove the possibility of human error. DeFi also allows for 24/7 access and transactions, meaning that regardless of what time, or where you are in the world, you still have full accessibility. This also addresses issues such as underserviced banking areas. Many regions still don’t [offer the same banking](https://www.financedigest.com/first-abu-dhabi-bank-could-renew-35-billion-offer-for-stanchart-bloomberg-news.html "First Abu Dhabi Bank could renew billion offer for StanChart -Bloomberg News") services in comparison to others. DeFi gives [people from all walks of life](https://www.financedigest.com/life-post-brexit-people-must-take-precedent.html "Life post Brexit – people must take precedent") the opportunity to choose how they use and store their assets. All these factors also mean that DeFi is a cheaper alternative to [banks whilst also being more secure](https://www.financedigest.com/what-banks-need-to-do-right-now-to-improve-their-digital-services-without-sacrificing-security.html "What Banks Need to Do Right Now to Improve Their Digital Services Without Sacrificing Security "). **How does this positively affect the acquisition process?** First and foremost, Smart Contracts allow for easy management of any agreements. A [smart contract is run on the blockchain meaning that it’s fully automated](https://www.financedigest.com/improving-your-home-with-smart-automation.html "Improving Your Home with Smart Automation") and controlled. These contracts are thus more efficient as there are no middlemen involved, also meaning no delays, and no insecurities. As they’re run on code, whatever [financial operation you can think of is no longer manually managed](https://www.financedigest.com/managing-the-hidden-security-gap-in-financial-services-the-office-printer.html "MANAGING THE HIDDEN SECURITY GAP IN FINANCIAL SERVICES: THE OFFICE PRINTER") but rather “forced” by the code to automatically fulfill its intended purpose. Whether this is sending/receiving assets, making payments, [exchanging from one currency](https://www.financedigest.com/currency-exchange-how-to-find-the-best-rates.html "Currency Exchange: How to Find the Best Rates") to another etc. As a result, there’s no room for human error, long waiting times, paperwork or mal-intended mismanagement. While assets refer to several types of things that hold value, and while we assume that this is tangible monetary, many [businesses hold other types](https://www.financedigest.com/types-of-business-loans.html "Types of business loans") of assets which don’t have the same liquidity as cash or crypto. Dealing with different assets requires assessments, agreements, and legalities which take time. Ensuring that all types of assets are dealt with equally with assurance can be achieved through DeFi. DeFi works with all types of assets & some [innovative projects](https://www.financedigest.com/taylor-fay-homes-recruit-cordant-projects-for-innovative-property-initiative.html "Taylor Fay homes recruit Cordant Projects for innovative property initiative") can help you transfer or exchange them across different blockchains, meaning more overall liquidity. This allows for easy management, easy access, and easy overviews while guaranteeing you get good prices and low fees. Trading also plays a role in this. While acquisitions are often reflected in the stocks of both parties, DeFi still provides income opportunities (both passive and active) during this time. The big difference in regards to [passive income](https://www.financedigest.com/5-mistakes-to-avoid-when-creating-passive-income.html "5 Mistakes to Avoid When Creating Passive Income") generation is that the returns on your “deposits” are way higher than what any bank would ever offer. For example we offer a [12.7% yearly yield](https://www.chainge.finance/) on $USDT ( a version of the digital dollar). Day trading on the other hand can be a riskier way of deriving [profit since](https://www.financedigest.com/apples-weak-iphone-sales-drive-first-profit-miss-since-2016.html "Apple’s weak iPhone sales drive first profit miss since 2016") – like in the case of stock trading – you need to have some solid info, a degree of experience and acquired trading skills.  When planning for this, the acquisition period can be a time in which you can still gain [assets and manage](https://www.financedigest.com/britains-post-brexit-asset-management-revamp-eyes-liquidity-tokenisation.html "Britain’s post-Brexit asset management revamp eyes liquidity, tokenisation") risk. Although these are a few of the many capabilities that DeFi can offer, the [finance industry is still stuck in its ways](https://www.financedigest.com/3-key-ways-you-can-transition-from-finance-to-fintech.html "3 key ways you can transition from finance to fintech") with a hesitancy to explore new technologies. With the DeFi industry becoming more popular and commonplace, it’s worth looking into how [businesses can use this tool to aid in the acquisition process](https://www.financedigest.com/5-reasons-why-modernising-is-the-most-important-ongoing-process-for-any-business.html "5 Reasons Why Modernising Is The Most Important Ongoing Process For Any Business"). Not only does it [save money](https://www.financedigest.com/saving-money-hacks.html "Saving money hacks"), but it saves time, effort, and increases overall stability while reducing risk. While it seems daunting to those of us new to this style of finance, it actually allows you to make more informed and transparent decisions. It also records all transactions on the blockchain, meaning it’s easy to manage. DeFi offers a solution to [problems we’ve been facing](https://www.financedigest.com/disconnected-customers-are-one-of-the-biggest-problems-facing-financial-companies.html "Disconnected customers are one of the biggest problems facing financial companies") for years. Being dissatisfied with your finance provider should not be the norm. Look into DeFi, [see what the industry](https://www.financedigest.com/airline-body-iata-sees-industry-recovery-now-in-2023.html "Airline body IATA sees industry recovery now in 2023") can offer, and use it according to your needs. You’ll find it’s much easier to use with truly limitless possibilities. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---