Can DeFi be called Decentralized Bank?

[RapTarX]

I don't have much knowledge on DeFi; till now, DeFi is offer a wide variety of financial transactions through blockchain which a traditional banks offer, for instance; Lending, Borrowing etc. If these are the activities of DeFi projects, can we call DeFi project a Decentralized bank? Nothing much important, was going through DeFi for a while and it seems kind of bank to me. That's why I am here to discuss with you guys.

[jackg]

In short: no.

Defi is more than just put down funds and get a return or you take out a margin.

In the financial sector, the banking part is probably only a few percent of the pie. The other financial sectors such as cfds and shares make up huge amounts of the sector with leverage taking up other amounts. I think we have leverage platforms on defi either fully functioning or in testnet now and those will be more attractive than just borrowing and paying back...

[RapTarX]

In the financial sector, the banking part is probably only a few percent of the pie.

There are a lot of financial institution which actually can be called as bank and the activities I mentioned above can be typed as commercial bank (partially) or Virtual Bank as well. I'm trying to compare both traditional banking and DeFi and come to a conclusion about the necessity of traditional bank in future.
Well, I guess I gotta research a bit more on DeFi. I have read a few articles only. I know that DeFi is more than what I have shared. Can't we get Banking services through DeFi? I guess we can.
Thank you for your valuable input, jackg.

[fiulpro]

No
I don't think we should call them banks.
The reason I think so:
1. It's not just that but a real world technology whose applications are wide
2. Yes, some might use the lending service but it's very few
3. Everyone is responsible for their own keeping of the particular currency and using it in whatever way they want, whereas in a bank , it's kept with an institution
4. Banks have backups, investors, centralized body, etc.. deFi is very different.
5. They don't need intermediary people
 A lot of reasons are there but I won't put them together with banks for sure.!

[jackg]

I know that DeFi is more than what I have shared. Can't we get Banking services through DeFi? I guess we can.

Enjoy the rabbit hole there (research).

And yes we can definitely get Banking services through defi. If its possible to show a qr code on a trezor screen (which it is) it's also possible to show it on a PoS system (chip and pin device).

[maye5104]

No, they are different terms. DeFi refers to the digital assets and financial smart contracts, protocols, and decentralized applications. Bank is an institution that accepts from ones and lend their funds to others. In fact, DeFi is more than depositing-borrowing structure.

[Ozero]

I don't have much knowledge on DeFi; till now, DeFi is offer a wide variety of financial transactions through blockchain which a traditional banks offer, for instance; Lending, Borrowing etc. If these are the activities of DeFi projects, can we call DeFi project a Decentralized bank? Nothing much important, was going through DeFi for a while and it seems kind of bank to me. That's why I am here to discuss with you guys.

In principle, such a comparison can be made. DeFi projects perform functions that were unique to banks. We can say that they take their piece of bread from the banks. However, what DeFi projects offer is much better, because thanks to smart contracts, transactions are performed automatically without the possibility of third party intervention and the possibility of various abuses. However, this is still in theory. Let's see how it all works in practice.

[verita1]

Due to the birth of cryptocurrencies and the need to diversify their use, developers of blockchain-based projects create DeFi decentralized finance.
Although you can obtain some benefits that the bank offers, its characteristics are different. The DeFi are decentralized, you are in control of your funds and without intermediaries.

[Bttzed03]

Apparently, there's already a DeFi project acting as Decentralized bank for digital assets - KAVA

The process of depositing crypto as a collateral to take out loans seems normal but then you can use what you just loaned as leverage to borrow more funds. That doesn't make sense to me and I think they're playing a dangerous game there. With a system like that, I think decentralized banking would collapse sooner or later.

[Stalker22]

Apparently, there's already a DeFi project acting as Decentralized bank for digital assets - KAVA

The process of depositing crypto as a collateral to take out loans seems normal but then you can use what you just loaned as leverage to borrow more funds. That doesn't make sense to me and I think they're playing a dangerous game there. With a system like that, I think decentralized banking would collapse sooner or later.

This is exactly how classic banking systems work today. They lend money to the people and then use that information as leverage for new loans from central banks. Madness!

[blockman]

Logically, we're looking at them as the same as the banks but technically, they're not. In terms of assets, the banks have a lot of it and even the other investment that they have starts to fall, they'll just plug in funds from their other investments.
IMHO, calling it a decentralized bank or not depends on the perspective of the person looking at it.