London Fashion Week. – File photo: © Tim Sandle
Part of the blockchain ecosystem that has grown in popularity over the past year is the Decentralized Finance (DeFi) industry, as a subset within FinTech. DeFi is a collective term for financial products and services available to anyone who can access a platform through an Internet connection and has a number of fashion industry clients.
Part of the reason for DeFi’s growing popularity is the range of financial products and services, which match traditional finance offerings, and alternative approaches to privacy, flexibility, and cost, which will appeal to some users. Transactions are carried out using a smart contract.
DeFi’s growth rate has led some market analysts to predict that mass adoption is not about if, but rather when. The growing popularity is attracting niche industrial sectors like fashion, and is starting to attract the interest of governments and financial regulators.
One platform that featured in the news, for its fashion-centric transactions, during the fourth quarter of 2021 is Nimbus, which is a decentralized autonomous organization ecosystem of dApps and is emerging as a bank. decentralized for its users.
Why is there an increase in adoption of this digital finance program by the fashion industry? Fashion may not be a big deal when it comes to cryptocurrency, but, according to Forbes, many fashion startups choose to use cryptocurrencies to do business. The Retail Gazette reports that many high-end fashion brands are moving forward with online models and want to allow consumers to make purchases using cryptocurrency in order to broaden their appeal to many members of the market. the GenZ population.
In addition, some of the profitable fashion companies are using any excess profit to provide direct loans to other DeFi market participants in the art and design space. This is provided through an app that offers different lending and borrowing options based on risk-adjusted criteria and allows direct matching of users by location.
One factor is the ease of switching from one token to another to bring more liquidity to a business, coupled with the ability to use different products and services at the same time without needing to use centralized financial entities.
Besides the business-to-business lending model, DeFi has the potential to confer benefits on a day-to-day basis. This includes the ability to eliminate “unbanking” among the world’s population, by providing services to those who cannot access or are denied traditional bank accounts.