The rise of Decentralised Finance applications has been one of the most exciting developments in the blockchain space in recent years. By allowing users to directly interact with each other without the need for intermediaries, DeFi apps have opened up a whole new world of possibilities for how we use and exchange value. One of the key innovations that have made DeFi possible is the use of smart contracts. But what is it exactly and how does it work? Keep reading to find out.
DeFi 101: What Is It and How Does It Work?
DeFi is a decentralised finance platform built on the blockchain. It enables businesses to raise capital, make payments, and trade without having to go through a traditional financial institution. This means that businesses can operate completely independently of banks and other third-party intermediaries.
At its core, DeFi is about using decentralised protocols to build financial instruments that are accessible to anyone with an Internet connection. This infrastructure is powered by smart contracts — self-executing contracts that live on the blockchain. By deploying these contracts, we can create decentralised applications (dApps) that provide a wide range of financial services. These services include lending and borrowing platforms, stablecoins, derivatives, and more.
DeFi platforms tend to have lower fees than traditional financial institutions. This is because there are no intermediaries involved in the transactions. In addition, the use of smart contracts to automate certain processes helps to further reduce costs and margin of error by eliminating the need for manual processing.
What are Smart Contracts and Why Are They Important?
Smart contracts are self-executing contracts that are written in code and stored on the blockchain. Since the contract is stored on the blockchain, it is immutable — meaning it cannot be changed or tampered with. This guarantees that both parties will uphold their end of the deal, hence providing a trustless way of interacting with others. In a traditional setting (e.g. borrowing from a bank), there is always a middleman involved and this party adds friction to the system and increases costs for everyone involved.
With smart contracts, the need for third-party intermediaries is removed altogether. This makes the system more efficient since there are no delays associated with waiting for approvals from a centralized authority. In addition, smart contracts can be used to automate various processes, such as payments and settlements which in return help businesses save time.
How do Smart Contracts Benefit Businesses?
One of the main advantages of using smart contracts is that they can help increase the credibility of the business as transactions will be automatically executed once both parties have fulfilled their obligations. For example, when two strangers enter into a business transaction on eBay, they have little recourse if things go wrong. But if they were using a decentralised platform that utilised smart contracts, the terms of their agreement would be enforced automatically, hence promoting the credibility of the business as customers would not have to worry about transactions going amiss.
Another advantage of using smart contracts on the blockchain is that they promote transparency and allow easier authentication. For example, Ticketmaster can use smart contracts on blockchain to reduce the number of fake or unverifiable tickets sold. Buyers can then verify with Ticketmaster automatically before buying the tickets from the secondary market.
Powering Payment Gateways via Smart Contracts
We at Paywong harness the power of smart contracts to provide merchants with a fully decentralised payment gateway that offers all the benefits that come with DeFi and smart contracts. Merchants can receive cryptocurrencies without any intermediaries and in real time. Smart contracts enable automatic processing of payments from the acceptance and swapping of funds straight to settlement.
With Paywong, anyone can accept crypto payments, including stablecoins, from anywhere in the world with low transaction fees, with or without a website. The startup is also working with a third-party off-ramp solution to allow its users to convert crypto to fiat in real time. Paywong is a non-custodial crypto payment gateway that provides merchant services for businesses that cater to all kinds of customers. In addition, Paywong is also useful for individuals who are working as freelancers and want to get paid for their services in crypto.
Paywong is slated to launch next month with features that include an intuitive dashboard to manage user funds, e-commerce integrations and also an invoicing system that generates a payment link for anyone to share. They are currently offering the first 5,000 signups with a lifetime offer of 0.5% merchant transaction fee. Simply join the waitlist, and you’ll be on your way to accepting crypto as payment from your customers.
For additional information and updates, visit the official website along with the Twitter, Linkedin and Telegram channels.
About The Company
Paywong is a product of Walawong Solutions Pte Ltd — a Web3 startup based in Singapore. We are on a mission to simplify crypto payments for businesses by leveraging the power of blockchain technology.
Contact:
Moe Tengku
CEO/Co-Founder
moe@paywong.com
Sam Zulkifli
COO/Co-Founder
sam@paywong.com
