By: B.R. Johnson
There is a new buzzword flitting about the financial world, DeFi. What does it mean? What can it do for you? What are the implications for investors going forward?
DeFi stands for Decentralized Finance. It is an emerging technology for finance that is based on secure ledgers similar to those used in cryptocurrency. This technology bypasses brokers, banks, and the financial institutions as a whole. DeFi allows you the freedom to send, spend, and earn with the money you have, without the fees and wait times of traditional banking.
You control where it goes and how much you can make from it. No one controls your money but you. The banks invest your money while you aren’t using it and they take their time getting it back to you.
DeFi changes that, especially when it comes to some of the newer projects on the scene with low transaction fees and cutting edge technology. You no longer have to pay some banker to send your money, all while charging you a hefty fee. You can now store, send, and receive tokens in seconds; anytime, day or night, all while earning interest on your assets.
With the introduction of smart contracts this process can be automated even further, creating a myriad of ways you can earn passive income. You can learn more about smart contracts here.
Having access to all of this technology opens the door for earning passive income, making your money work for you. With DeFi the sky is the limit, and The Reaper has plans to leave the stratosphere. In the stock market most investors know about traditional Drip investing. Drip stands for Dividend Reinvestment plan and typically refers to the cash dividends an investor receives being automatically reinvested into the same stock it was earned from.
The Reaper looks to redefine Drip payouts with their own DeFi. If you are unfamiliar with how Reaper works you can learn more here. Once a certain price point is reached, the Reapings will be divided in half. One half of the capital raised will go to the burning of the project voted to be Reaped, the other half will go into an interest bearing DeFi account. Early estimates are projected as high as 14% APY. As each Reaping occurs the funds deposited into these accounts compound month after month. This interest bearing account will be used to pay Reaper’s Drip to it’s holders in the form of XRP.
You can see the hypothetical math and mechanisms in the white paper here. DeFi is heating up across the entire crypto sphere and redefining how investors make their money work for them. Reaper is setting the bar high in the DeFi space and their Drip plan is only the beginning.
