Today, there is a significant increase in a number of companies that are joining the bustling financial service industry. These companies have resorted to creating their own products so they may attract customers to patronize them.
Some even build their own ecosystems, with features that are tantalizing to the eyes of prospective investors and clients. This “diversity”, brought by the growing number of players, along with their own products, services, and ecosystems, however, presents challenges.
A classic example is the problems encountered on the distribution aspect. These hinder the mass adoption of financial products.
This conundrum seems to be one of the key reasons why the emergence of companies such as Verso Finance comes as a blessing.
Understanding CeFi and DeFi
In order to understand and appreciate what Verso Finance is, what it does and how it works, one must first take a quick lesson about two important things – Centralized Finance (CeFi) and Decentralized Finance (DeFi).
In Centralized Finance, all crypto trade orders are handled through a central exchange and funds are managed by a specific entity. This means you don’t have your own private key to access your digital wallet. In Decentralized Finance, no exchange is involved and the complete process operates through automated applications that are developed on top of blockchain platforms.
CeFi institutions work in the same principle as the very nature of the finance system their name is derived from.
Verso provides the bridge
Verso Finance, a decentralized marketplace for the regulated financial service industry, aims to be a bridge for the emerging DeFi sector with traditional finance.
Since these two already have an established relationship provided by digital wallets and bank accounts, Verso targets to amplify such by giving traditional financial service providers the ability to distribute scaled microfinance products.
Regulated financial services like insurance firms, lenders, among many others benefit from services offered by Verso Finance, but product violators and financial industries such as digital wallets and banks are also among the company’s participants.
Verso operates on the Avalanche blockchain that consists of multiple chains. It also has a native token, known as VSO, which validators get as a reward.