Disintermediation, within the context of crypto technology and investing, signifies the reduction or removal of intermediaries from financial transactions and services. This process directly connects market participants, such as buyers and sellers of crypto assets, through decentralized protocols or peer-to-peer networks, bypassing traditional financial institutions like banks, brokers, or clearinghouses.
Mechanism
In crypto, disintermediation is enabled by blockchain technology and smart contracts. These distributed ledgers facilitate trustless transactions, where cryptographic proofs replace the need for central authorities to verify and settle exchanges. Smart contracts automate agreement execution, removing the requirement for legal or administrative oversight in many financial operations, including lending, borrowing, and options trading.
Methodology
The strategic approach emphasizes creating permissionless and transparent systems that reduce transaction costs, increase speed, and enhance censorship resistance. It aims to democratize access to financial services by lowering entry barriers and increasing autonomy for users. This methodology seeks to build more efficient and resilient financial infrastructures by removing points of control and potential failure associated with intermediaries.
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