DeFi: A revolution incoming

Experts say that India is ripe for emerging as a leader for DeFi in Asia. It has the power to transform how the world’s fifth-largest economy interacts with money.

DeFi can provide cheap financial solutions (getting loans, lending money, earning interest, and many more) to crores of Indians who are not eligible for these services right now.

What is DeFi?

DeFi (decentralized finance) is the crypto version of the finance industry.

It refers to financial services like depositing, withdrawing, lending, borrowing money, and many more with the help of smart contracts (a program that runs when certain conditions are met) instead of trusting financial institutions such as banks or exchanges like the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), and NASDAQ.

DeFi comes with all the crypto features because its underlying technology is public blockchains like Ethereum and Solana.

It is:

  • Global: Can be accessed by anyone sitting in the world.
  • Peer-to-peer: Directly between two people.
  • Pseudoanonynous: Can be accessed without revealing any information about the user.
  • Transparent: Everyone can see the transactions on the public blockchain.

Capabilities of DeFi

DeFi has a lot of advantages over CeFi (centralized finance) like:

  • Trust
  • Open to all
  • Ownership and returns
  • Transparent
  • Flexible and fast
Source: Odyssey DAO


  • DeFi: Trusts code.
  • CeFi: Relies on middlemen.

In CeFi (centralized finance), you need to rely on a bank to send money, earn interest, and get a loan.

For example, there was a breach of trust when loans without proper checks were issued to famous industrialists like Nirav Modi, leading to a loss of about ₹11,356.84 crores. It would not have been issued in DeFi because it relies on code, which means every transaction is public and will not be completed if proper checks in the smart contract are not met.

Open to all

  • CeFi: You need to apply for opening a bank account with your ID.
  • DeFi: You can access it by creating a wallet.

For example, in CeFi (centralized finance), you need to apply for opening an account in the bank before using any bank’s financial services. But in DeFi, you don’t need anything to create your wallet to access any service of a DeFi app.

Ownership and returns

  • CeFi: Banks or the middlemen own and control your money. It provides low returns because middlemen take out a significant cut from the transactions.
  • DeFi: You own and control your money. It provides high returns because there is no involvement of middlemen who take the cut.


  • CeFi: You are blind to the internal operations of banks.
  • DeFi: Multiple DeFi protocols are open source (public code on the internet), and everyone involved can see all of the transactions.

For example, in CeFi (centralized finance), you don’t know what the bank does with your money. But in DeFi, the process your money goes through is public because the code is public on the internet.

Flexible and fast

  • CeFi: Opens only during business hours, asks for lots of privacy permissions and long transfer time.
  • DeFi: Works 24/7, no permissions required, fast, cheap, and works across the globe.

For example, suppose an individual wants to transfer money from anywhere in India to Europe at any time. In that case, there is no way in centralized finance to execute this transaction instantaneously with minimal cost. Still, using DeFi, this transaction can be performed instantaneously at a low cost at any time of the day.

How does it work?

Dapps(decentralized apps) are used to access DeFi. Anyone with a wallet can engage with these Dapps, so no need to “open” an account with any centralized authority.

Users generally use DeFi applications for

  • Lending: You can lend your crypto to earn interest in short intervals of time, like per minute/hour and not per month/year. The rates vary between 5% to 200%, and these can be compounded automatically to give even higher returns.
  • Trading: You can make peer-to-peer trades. It is similar to buying/selling stocks without any brokerage fee.
  • Borrowing: You can get instant loans without paperwork while submitting your crypto as collateral. It also provides the facility of flash loans which means you can get loans of millions of dollars for a very short period using protocols like AAVE.
  • Savings: Put some of your cryptos into savings account alternatives like Flint and earn better interest rates on fiat currency than you’d typically get from a bank.
  • Buying derivatives: These are crypto versions of stock options and futures contracts. You can make short-term and long-term bets.

DeFi for India

DeFi expands on the functionality of digital money, creating an entire digital alternative to Dalal Street, but without all the hefty costs (office buildings, trading floors, salaries).

COVID-19 credit crisis

In India, the COVID-19 lockdown resulted in thousands of SMEs going bankrupt and doing mass layoffs. This is a clear indicator of an urgent need for financial assistance for the general public.

The current financial system has lots of barriers before approving a loan.

It is challenging for pandemic victims with low or no income to take a loan because of unequal access, censorship, the absence of universal interest rates, and lack of transparency.

DeFi solves this. It works with an anonymous network of nodes to reach a decentralized consensus.

One can lend money, draw loans, trade/exchange assets, and complete complex transactions with blazing fast speeds and low prices without any privacy-invading permission.

Banking the unbanked population

190 million people in India are unbanked because of many restrictions on opening a bank account. You have to submit an application form, ID and address proof, employment proof, passport size photographs.

The vision for DeFi is that anyone who owns a phone and has a strong internet connection can understand and access finance using DeFi.

Solving unemployment

DeFi will create lucrative job opportunities for 120 million unemployed Indians. India has the second-largest blockchain developer base globally (after the US), with 300+ blockchain-based startups and multiple state governments tapping into DLT(distributed ledger technology) solutions.

According to a report by Chainalysis

India is one of the world’s fastest growing crypto markets, increasing by 641% between July 2020 and June 2021.

Bad Loans

A loan that is not repaid is called a bad loan.

Banks have written off bad loans worth ₹19.18 lakh crore till March 2021. The extent of these “bad loans” is greater than the loss from the 2G scam (₹1.76 lakh crore) or Coalgate (₹1.86 lakh crore).

This can be reduced using DeFi loans. They have features like:

  • Accountability: A public distributed ledger serves as proof of all financial transactions.
  • Transparency: They can be verified by any user of the network.
  • Consistency: Rates and rules of DeFi loans are clearly stated, leaving no room for error.


The DeFi scene is bursting with innovation and investment that can change the landscape of current financial systems.

With many rug pulls, high complexity for users, and an unpleasant user experience, it isn’t easy to navigate through DeFi for beginners. To ease everything, Flint provides returns up to 13% p.a. with controlled risk and no lock-in period.

DeFi will continue to grow just as India grows, and Flint will continue to offer its services as DeFi expands further. With the legal acceptance of cryptocurrencies in #Budget2022, the future holds infinite possibilities.



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