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What is DeFi in Crypto & Why Do We Need It?

Nov 9, 2020

Today, the world’s centralized banks are printing money at unprecedented rates to plug the holes of a sinking global economy. Unlike before when national currencies were still pegged to the gold standard, most of the currency being printed today isn’t backed by anything at all. Decentralized solutions for alternative and more direct payments are emerging to bypass these antiquated, centralized systems.

Hence, decentralized finance (DeFi) has been one of the fastest-growing sub-industries of blockchain. In 2020 alone, DeFi’s Total Value Locked (TVL) grew from $660 million in January to over $11 billion in November; an increase of over 400%. Mind-blowing! DeFi technology is used across software applications, lending services, and now with Mogul… film.

DeFi in the Film Industry

Mogul allows filmmakers to go beyond centralized, massive production houses. Using our STARS token and continuous fund, filmmakers and movie fans alike have a decentralized voting and financing framework where standout films are chosen for the big screen.

To learn more about cryptocurrency and its applications, head over to our website.

Major DeFi Opportunities: dApps, Lending, And NOW… Film

Within the field of DeFi, there have traditionally been two major use cases: dApps and lending. Lending has more to do with what we just previously touched on with TVL, whereas dApps are sort of the smarter, younger cousin of banking applications that users are already familiar with. However, there are still new use cases emerging, like what we’re doing with DeFi and film.

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dApps

One major difference between a smartphone app that you have downloaded on your device right now and a dApp is that dApps rely on peer-to-peer servers to run the backend code. Traditional smartphone apps use standalone computers, or single cloud servers to run their code. Popular examples of dApps include CryptoKitties, UniSwap, and OpenSea. Of course, CryptoKitties is an example of a non-fungible token as well.

There are also some outside-the-box ideas for dApps. One example is Augur, which describes itself as the world’s most accessible, no-limit betting platform. Another example of a unique dApp is PoolTogether, a decentralized, no-loss lottery application that allows all participants to get money back with one participant winning all the interest from a shared pool.

Lending

Loans are one of the fastest-growing markets within the DeFi space. Similar to what banks have been able to do for centuries, crypto holders can earn interest on their digital assets by loaning them out. Borrowers then have to put collateral down to secure the loan, just like a person or company would have to do in the physical world.

Film

Our development team has created a quadratic voting module within our platform that allows STARS holders to earn up to 0.5% yield per day on their balance for casting and staking their votes. Our protocol incentivizes users to voice their opinion. This type of voting reflects decisions that are representative of the entire community, not just whomever has the most tokens.

Ethereum co-founder Vitalik Buterin has recently commented both on the potential for blockchain-based voting, and on quadratic voting (QV) specifically.

He said “The technical challenges with making a secure cryptographic voting system are significant (and often underestimated), but IMO this is directionally 100% correct.” Read Vitalik’s paper on QV here.

Mogul uses the Ethereum blockchain and we understand the potential of the technology’s impact on voting.

Visit our website to learn more about how Mogul is using DeFi for film.

In Closing

Decentralized finance and technology will continue to grow as the world continues to crave alternative solutions to centralized financial structures. DeFi products will revolutionize the way that the average person borrows, saves, and spends money. However, far beyond applications like lending, the possibilities for DeFi to extend to more than money are endless. It will be exciting to see how the next year of development will advance the industry.

At Mogul, we’re exploring applications for DeFi and the film industry. Stay ahead of the curve on decentralized finance and other crypto topics by visiting our website.

FAQ

What is DeFi in crypto?

Decentralized finance (DeFi) has less to do with cryptocurrency than it does the financial technology that runs in the background of crypto. DeFi is a guiding philosophy and design principle behind alternative asset classes and related technology. It is a move away from massive, centralized production houses that can bring power to the crowd.

Mogul Productions, established 2019, is a blockchain-based film finance and production company with a presence in Canada, the United States of America and Europe. Mogul’s platform connects contributors, film industry professionals, and fans through technology that allows all users to engage and participate with each project throughout their entire lifecycle, from financing through to production and distribution.