Decentralised finance, or DeFi for short, draws its inspiration from the underlying technology of Bitcoin and other cryptocurrency networks. Bitcoin - a public payment network in which anyone can send money to anyone else - was just the beginning of the DeFi revolution. 

Bitcoin was a breakthrough in computer science which removed centralised systems and human gatekeepers when transferring value between parties, known as a peer-to-peer transfer. This allowed people to manage their wealth with greater transparency and control.

We live in a world in which information can be shared instantly with anyone who has an internet connection. If one is to consider that money is almost entirely digital, why is the cost and efficiency of transferring value not held to the same standard? 

What is DeFi?

DeFi is simply the umbrella term for an entire ecosystem of financial services that operate without any central authority and is available to anyone with an internet connection. 

Traditional financial services have struggled to keep up with the technological innovations of the world today. They have become slow, expensive, and prone to human error - this is where DeFi steps in.

DeFi is an amazing new sector aiming to revolutionise our financial infrastructure and make life more efficient and fun. Our DeFi Bundle is a market capitalisation weighted basket of the best current DeFi protocols. 

By utilising peer-to-peer blockchain-based networks, users can borrow, save, send, receive, buy, sell, and even insure their money through DeFi applications. These innovative blockchain-based applications have created a financial ecosystem for everyone - capable of bypassing banks, brokers, exchanges and the other middlemen who traditionally manage and process financial services. 

What are the benefits of DeFi?

DeFi resolves an age-old problem of the middlemen taking their share of your personal finances. By removing this interference, DeFi users have more freedom when managing their money. This freedom brings several benefits to anyone with an internet connection. These benefits include financial inclusion, real-time and transparent transactions, custody of your own assets, and last but not least, higher yield generating options when compared to traditional financial services. By cutting out the financial intermediary, DeFi allows its customers to earn all the yield for themselves - no hidden fees. However, the nascency of this sector comes with risks such as the immaturity of the technology, lack of consumer protection, high collateral requirements and the secure management of one's coins. 

Why Invest in DeFi?

‍High Growth and Adoption 

The DeFi sector is currently one of the most exciting and innovative areas of financial services, characterised by extreme growth in investment. The total amount of value locked in DeFi applications denominated in US Dollars has grown from $2.47 Billion to $83.69 Billion in the last 2 years - that’s a growth of over 3 288%. This astonishing adoption in the DeFi space shows just how much value customers are attaching to the ability to manage their own personal finances.

Undervalued

While DeFi is growing rapidly, it still represents a very small portion of the sectors it looks to challenge. The global stock and derivative markets are valued in excess of $2 quadrillion, an almost unimaginably large number, and DeFi is poised to disrupt it. “With the DeFi sector currently valued at just over $190 billion, it has only captured 0.01% of the market. It only makes up 1.6% of the global banking industry, showing just how much potential it has to grow.” - Says Arran Briceland, Investment Analyst at Altify.

How can I invest in DeFi?

The cryptocurrencies fueling DeFi protocols of today are receiving worldwide attention, however, one must understand that these are still experiments. It is extremely difficult to identify the winning DeFi applications which will provide an attractive return on investment and still exist in the years to come.

Altify has simplified the investment process into the leading DeFi assets through the unique DeFi Altify Bundle. This bundle offers market capitalisation weighted exposure to the top 10 most prominent DeFi enabled cryptocurrencies. It is a direct investment in the cryptocurrencies constituting the Bundle and offers investors an innovative, cost-efficient and secure way to access the DeFi Sector. 

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The DeFi sector has had an attractive past month of performance. The Altify DeFi Bundle boasts a 28.38% return on investment since the beginning of July 2022. This means that a R10 000 investment into the Altify DeFi Bundle one month ago would be valued at approximately R12 838.

The graph below illustrates the performance of the Altify DeFi Bundle over the past month. 

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‍This Bundle automatically rebalances (slight changes to the weighting and assets in the undle) on the 1st of every month. It takes advantage of opportunities available from the most reputable DeFi cryptocurrencies through buying or selling each asset. This dynamic and fully automated approach makes investing effortless, maximising your returns and saving you time.

By investing in the Altify DeFi Bundle, you can own a stake in the future of finance without the hassle of managing multiple DeFi cryptocurrencies across a host of different cryptocurrency exchanges. 

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