1, the main function of DeFi at present. We know that the core functions of traditional finance (centralized finance) are lending, payment, futures, options, margin, investment management and so on. DeFi (open finance), as an unauthorized financial ecology, must be carried out around the core function of traditional finance, that is, lending, which is the first thing that can be thought of. Therefore, at present, we see that: in terms of loans, DeFi applications are booming, such as MakerDao, the central bank on Ethereum, Compound, automation companies, and DHARMA, peer-to-peer loans. Among them, the assets currently locked by MakerDAO and Compound reach US$ 329 million and US$ 99.6 million respectively, far exceeding other DeFi projects (the data may be inaccurate, but somehow Defipulse.com can't open it today. They are similar to traditional financial banks and are encrypted DeFi banks. In terms of asset value, they account for more than half of the total value of $680 million currently locked by DeFi. In addition, we also see that there are Defi:Kyer, Uniswap, Bancor in transaction and payment. They are equivalent to the New York Stock Exchange, Shanghai Stock Exchange and Nasdaq of traditional finance. In financial derivatives and investment management, there are: auger-binary options, dYdY-margin trading and Melonport5, which are equivalent to traditional financial funds and securities companies. However, there is still a big gap between the number of these DeFi projects in terms of transaction payment and financial derivatives and the types of loans. In other words, the current development of DeFi in the business field is exactly the same as that of traditional finance. Like traditional finance, the main function is mainly focused on lending. The difference is that DeFi is in the world of virtual currency, and it realizes the preservation and appreciation of assets by lending assets in the chain. Having said that, you may be tempted to think, will lending become the basis of DeFi? After all, last year's data and recent data revealed too much imagination: TokenInsight's Annual Research Report on 20 19 DeFi Industry said that the total value (USD) of the DeFi lock in Ethereum increased from USD 290 million in 20 19 to USD 680 million, and the value more than doubled. Today's DeFi Pulse data shows that the number of ETH locked in DeFi applications has exceeded 3 million, and now it is 3.023 million, which continues to hit a record high. Imagine that traditional finance has prevailed for so many years, and it is difficult for DeFi to take a slice of the mature traditional finance. At present, this volume is gratifying in the currency circle, but compared with traditional finance, it can only be regarded as nine Niu Yi hairs, and the long road has just begun. Personally, if Defay wants to gain a firm foothold in the end, the future mainly depends on whether he can give full play to the following aspects. 2. What is the key role of 2.DeFi? First, meet the needs of some specific groups and play the same role as traditional finance. In the real world, some people want to completely control their own assets and financial services, which is the key to DeFi's needs, because DeFi has the characteristics of non-intermediation, no permission and transparency, which can fully satisfy this group's desire to control their own assets; But we have to admit that not everyone has the will or ability to manage assets, because we often hear the saying that "professional things are left to professional people"; Therefore, from this perspective, DeFi can coexist with traditional finance, meet the needs of different groups, do their own things, and finally judge success or failure by the needs of customer groups. The second is to play the role of fund custody service and become a supplement to traditional finance. We know that in the real world, when we make large transactions, there are often fund custodians. For example, when we buy a house, we usually put the funds in the custodian bank before the transfer is completed, and the bank will transfer the loan to the seller. This is mainly to protect the rights and interests of buyers and sellers and avoid the occurrence of dishonest behavior of either party. But in the currency circle, exchanges and wallets often run away, and money and coins are gone. The fundamental reason is the lack of fund custody service in the currency circle, which is a great demand in the currency circle, but at present, few traditional banks are willing to do it and dare to provide it. Therefore, can the DeFi custody business in the form of Taoism explore and develop in this respect and become a useful supplement to traditional finance? Third, the world and the real world of Germany and Philippines exist independently, which is the key to the existence of Germany and Philippines. There is no need to guarantee and provide various materials. Moreover, the loan mortgage in DeFi will not affect your reputation in the real world, and will not affect the amount of your housing loan and consumer loan because of the mortgage of digital currency assets. Conclusion: From the above, DeFi is still very useful. However, one issue we have to talk about is financial supervision. In traditional finance, strict KYC and AML mean license, permission and authentication, while the essence of DeFi is a financial ecology without permission. Therefore, whether this completely chained financial model can grow up in a country with strong supervision, but gold will always shine.