Is Decentralized Finance just another trend?

a.shah

13 Oct 2020
Is Decentralized Finance just another trend?

Have you been hearing about Decentralized Finance and wondered what it really is? Why has it become so popular? On our Nextrope blog, we break down the technology to decipher its constituents and understand what makes it tick. We compare it to Centralized Finance (the current status quo) and see how it holds up.

Why fix something not broken – Centralized Finance vs Decentralized Finance?

Humans have always had a centralized authority directing and regulating the way they earn and spend money. The norm is that a central mint prints and distributes money, the central bank lends to other banks who then lend to their customers, and these customers deposit their savings back into the banks. It has worked for hundreds of years. Why then do we feel like we need an alternative? Why is Decentralized Finance (DeFi) trending? The simple answer is that Centralized Finance (CeFi) has always had glaring problems, but most chose to ignore it since there was no other alternative at hand. With the introduction of distributed ledger technology (blockchain), this is no longer the case. Decentralized Finance has finally become a reality, albeit with drawbacks of its own.

Whenever power, especially financial power, is centralized, most people get locked out of the decision-making process. Consequently, only a small portion of the population reap the benefits of the financial system while the rest are charged exorbitant fees, high interest rates and low returns. Even in the US, only 7% of the bottom 80% of society own shares in companies, whereas in other nations, most do not even have access to stock markets. Currently, transferring money outside of the country involves countless middlemen and substantial fees, obtaining a loan is met with walls of red tape and bureaucracy and the interest rates on deposits is often abysmal.

Even the safety factor that was attributed to banks eroded after the 2008 housing bubble. 2008 showed us that when few control all the money, risk accumulates at the center and endangers the entire system. In addition, banks use money in ways that most people don’t understand. In times of emergency, bank runs (many clients withdrawing their money from a bank) can quickly lead to zero cash balances, as seen in places like Argentina, Venezuela and Zimbabwe.

Is it surprising then that Bitcoin was first launched in 2009, a year after the financial crisis? There was a dire need for the first-ever solution to have global peer-to-peer settlements with no intermediaries required so that individuals could keep control over their assets. However, Bitcoin and early cryptocurrencies only decentralized the issuance and storage of money, not access to a broader set of financial instruments.

The infographic below describes a simplistic example of how the ideal decentralized exchange would occur compared to the status quo.

Source: Defi Pubs

Decentralized Finance (DeFi) – the unlikely hero?

On paper, Decentralized Finance (DeFi) is disruption defined, allowing individuals full control and access over their assets. DeFi is an umbrella term referring to all the financial applications, such as lending, borrowing, exchanging, and investing which occur through decentralized channels and exchanges. The idea is to create an open-source, permissionless, and transparent financial service ecosystem available to everyone via peer-to-peer (P2P) capability, operating without any central authority. DeFi is distinct because it expands the use of blockchain from simple value transfer to more complex financial use cases such as borrowing, insurance etc. The activity in DeFi has increased exponentially in 2020 with total value locked in increasing from $1 Billion to $10 Billion in a span of 4 months.

Source: Defi Pulse

As mentioned previously, DeFi is primarily being used for loans, trading and payments but there are additional use cases such as insurance and investing being developed. The Ethereum blockchain eco-system is the most popular for the development of these applications since it provides increased security, transparency, and growth opportunities. The Ethereum platform functions through ‘smart contracts’ which automatically executes transactions if certain conditions are met, removing the human element from all transactions.

Source: Block Crypto

While more and more people are being drawn to these DeFi applications, it’s hard to say where they’ll go. Much of that depends on who finds them useful and why. Many believe various DeFi projects have the potential to become the next Robinhood (popular online brokerage that enables stock trading at very low fees), drawing in hordes of new users by making financial applications more inclusive and open to those who don’t traditionally have access to such platforms.

DeFi’s not so shining armor

As with any new technology, there are growing pains. Some of the ones hurting DeFi particularly have been highlighted below:

1. Incomplete decentralization - Although protocols are decentralized and based on consensus algorithms, many access points to the system, like exchanges, are still centralized. In addition, many crypto projects are managed through centralized organizations or companies that too often lack transparency or accountability, and do not openly show the development of new parts of the ecosystem.

2. Volatility - Many DeFi applications, such as meme coin YAM, have crashed and burned, sending the market capitalization from $60 million to $0 in 35 minutes. Other DeFi projects, including Hotdog and Pizza, faced the same fate, and many investors lost a lot of money.

3. Security – While there are no humans involved in the smart contract process, humans do create the contracts and that is a major source of errors. Smart contracts are powerful, but they can’t be changed once the rules are baked into the protocol, which often makes bugs permanent and increases risk.

4. Rising Network fees – Network usage is directly correlated with fees and due to the recent popularity of DeFi, the Ethereum fees have sky-rocketed. This has led to a decrease in profitability for DeFi users and is hindering user experience.

Source: Coindesk

5. Risk of Fraud – While smart contracts have no human involvement in its execution, there are humans involved in its coding. This vulnerability leaves the door open for errors and subsequent attacks on the network.

Conclusion

Decentralized Finance is still at its nascent stage and is still trying to find solid ground beneath its legs. Blockchain and cryptocurrency enthusiasts seem to think there is enormous potential and have therefore poured significant sums of money into various DeFi platforms. Given the multiple challenges DeFi currently faces, worse comes to worst, it will at least force the centralized system to become more competitive by introducing changes to their structure.

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AI in Real Estate: How Does It Support the Housing Market?

Miłosz Mach

18 Mar 2025
AI in Real Estate: How Does It Support the Housing Market?

The digital transformation is reshaping numerous sectors of the economy, and real estate is no exception. By 2025, AI will no longer be a mere gadget but a powerful tool that facilitates customer interactions, streamlines decision-making processes, and optimizes sales operations. Simultaneously, blockchain technology ensures security, transparency, and scalability in transactions. With this article, we launch a series of publications exploring AI in business, focusing today on the application of artificial intelligence within the real estate industry.

AI vs. Tradition: Key Implementations of AI in Real Estate

Designing, selling, and managing properties—traditional methods are increasingly giving way to data-driven decision-making.

Breakthroughs in Customer Service

AI-powered chatbots and virtual assistants are revolutionizing how companies interact with their customers. These tools handle hundreds of inquiries simultaneously, personalize offers, and guide clients through the purchasing process. Implementing AI agents can lead to higher-quality leads for developers and automate responses to most standard customer queries. However, technical challenges in deploying such systems include:

  • Integration with existing real estate databases: Chatbots must have access to up-to-date listings, prices, and availability.
  • Personalization of communication: Systems must adapt their interactions to individual customer needs.
  • Management of industry-specific knowledge: Chatbots require specialized expertise about local real estate markets.

Advanced Data Analysis

Cognitive AI systems utilize deep learning to analyze complex relationships within the real estate market, such as macroeconomic trends, local zoning plans, and user behavior on social media platforms. Deploying such solutions necessitates:

  • Collecting high-quality historical data.
  • Building infrastructure for real-time data processing.
  • Developing appropriate machine learning models.
  • Continuously monitoring and updating models based on new data.

Intelligent Design

Generative artificial intelligence is revolutionizing architectural design. These advanced algorithms can produce dozens of building design variants that account for site constraints, legal requirements, energy efficiency considerations, and aesthetic preferences.

Optimizing Building Energy Efficiency

Smart building management systems (BMS) leverage AI to optimize energy consumption while maintaining resident comfort. Reinforcement learning algorithms analyze data from temperature, humidity, and air quality sensors to adjust heating, cooling, and ventilation parameters effectively.

Integration of AI with Blockchain in Real Estate

The convergence of AI with blockchain technology opens up new possibilities for the real estate sector. Blockchain is a distributed database where information is stored in immutable "blocks." It ensures transaction security and data transparency while AI analyzes these data points to derive actionable insights. In practice, this means that ownership histories, all transactions, and property modifications are recorded in an unalterable format, with AI aiding in interpreting these records and informing decision-making processes.

AI has the potential to bring significant value to the real estate sector—estimated between $110 billion and $180 billion by experts at McKinsey & Company.

Key development directions over the coming years include:

  • Autonomous negotiation systems: AI agents equipped with game theory strategies capable of conducting complex negotiations.
  • AI in urban planning: Algorithms designed to plan city development and optimize spatial allocation.
  • Property tokenization: Leveraging blockchain technology to divide properties into digital tokens that enable fractional investment opportunities.

Conclusion

For companies today, the question is no longer "if" but "how" to implement AI to maximize benefits and enhance competitiveness. A strategic approach begins with identifying specific business challenges followed by selecting appropriate technologies.

What values could AI potentially bring to your organization?
  • Reduction of operational costs through automation
  • Enhanced customer experience and shorter transaction times
  • Increased accuracy in forecasts and valuations, minimizing business risks
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Want to implement AI in your real estate business?

Nextrope specializes in implementing AI and blockchain solutions tailored to specific business needs. Our expertise allows us to:

  • Create intelligent chatbots that serve customers 24/7
  • Implement analytical systems for property valuation
  • Build secure blockchain solutions for real estate transactions
Schedule a free consultation

Or check out other articles from the "AI in Business" series

AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

Gracjan Prusik

11 Mar 2025
AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

AI Revolution in the Frontend Developer's Workshop

In today's world, programming without AI support means giving up a powerful tool that radically increases a developer's productivity and efficiency. For the modern developer, AI in frontend automation is not just a curiosity, but a key tool that enhances productivity. From automatically generating components, to refactoring, and testing – AI tools are fundamentally changing our daily work, allowing us to focus on the creative aspects of programming instead of the tedious task of writing repetitive code. In this article, I will show how these tools are most commonly used to work faster, smarter, and with greater satisfaction.

This post kicks off a series dedicated to the use of AI in frontend automation, where we will analyze and discuss specific tools, techniques, and practical use cases of AI that help developers in their everyday tasks.

AI in Frontend Automation – How It Helps with Code Refactoring

One of the most common uses of AI is improving code quality and finding errors. These tools can analyze code and suggest optimizations. As a result, we will be able to write code much faster and significantly reduce the risk of human error.

How AI Saves Us from Frustrating Bugs

Imagine this situation: you spend hours debugging an application, not understanding why data isn't being fetched. Everything seems correct, the syntax is fine, yet something isn't working. Often, the problem lies in small details that are hard to catch when reviewing the code.

Let’s take a look at an example:

function fetchData() {
    fetch("htts://jsonplaceholder.typicode.com/posts")
      .then((response) => response.json())
      .then((data) => console.log(data))
      .catch((error) => console.error(error));
}

At first glance, the code looks correct. However, upon running it, no data is retrieved. Why? There’s a typo in the URL – "htts" instead of "https." This is a classic example of an error that could cost a developer hours of frustrating debugging.

When we ask AI to refactor this code, not only will we receive a more readable version using newer patterns (async/await), but also – and most importantly – AI will automatically detect and fix the typo in the URL:

async function fetchPosts() {
    try {
      const response = await fetch(
        "https://jsonplaceholder.typicode.com/posts"
      );
      const data = await response.json();
      console.log(data);
    } catch (error) {
      console.error(error);
    }
}

How AI in Frontend Automation Speeds Up UI Creation

One of the most obvious applications of AI in frontend development is generating UI components. Tools like GitHub Copilot, ChatGPT, or Claude can generate component code based on a short description or an image provided to them.

With these tools, we can create complex user interfaces in just a few seconds. Generating a complete, functional UI component often takes less than a minute. Furthermore, the generated code is typically error-free, includes appropriate animations, and is fully responsive, adapting to different screen sizes. It is important to describe exactly what we expect.

Here’s a view generated by Claude after entering the request: “Based on the loaded data, display posts. The page should be responsive. The main colors are: #CCFF89, #151515, and #E4E4E4.”

Generated posts view

AI in Code Analysis and Understanding

AI can analyze existing code and help understand it, which is particularly useful in large, complex projects or code written by someone else.

Example: Generating a summary of a function's behavior

Let’s assume we have a function for processing user data, the workings of which we don’t understand at first glance. AI can analyze the code and generate a readable explanation:

function processUserData(users) {
  return users
    .filter(user => user.isActive) // Checks the `isActive` value for each user and keeps only the objects where `isActive` is true
    .map(user => ({ 
      id: user.id, // Retrieves the `id` value from each user object
      name: `${user.firstName} ${user.lastName}`, // Creates a new string by combining `firstName` and `lastName`
      email: user.email.toLowerCase(), // Converts the email address to lowercase
    }));
}

In this case, AI not only summarizes the code's functionality but also breaks down individual operations into easier-to-understand segments.

AI in Frontend Automation – Translations and Error Detection

Every frontend developer knows that programming isn’t just about creatively building interfaces—it also involves many repetitive, tedious tasks. One of these is implementing translations for multilingual applications (i18n). Adding translations for each key in JSON files and then verifying them can be time-consuming and error-prone.

However, AI can significantly speed up this process. Using ChatGPT, DeepSeek, or Claude allows for automatic generation of translations for the user interface, as well as detecting linguistic and stylistic errors.

Example:

We have a translation file in JSON format:

{
  "welcome_message": "Welcome to our application!",
  "logout_button": "Log out",
  "error_message": "Something went wrong. Please try again later."
}

AI can automatically generate its Polish version:

{
  "welcome_message": "Witaj w naszej aplikacji!",
  "logout_button": "Wyloguj się",
  "error_message": "Coś poszło nie tak. Spróbuj ponownie później."
}

Moreover, AI can detect spelling errors or inconsistencies in translations. For example, if one part of the application uses "Log out" and another says "Exit," AI can suggest unifying the terminology.

This type of automation not only saves time but also minimizes the risk of human errors. And this is just one example – AI also assists in generating documentation, writing tests, and optimizing performance, which we will discuss in upcoming articles.

Summary

Artificial intelligence is transforming the way frontend developers work daily. From generating components and refactoring code to detecting errors, automating testing, and documentation—AI significantly accelerates and streamlines the development process. Without these tools, we would lose a lot of valuable time, which we certainly want to avoid.

In the next parts of this series, we will cover topics such as:

Stay tuned to keep up with the latest insights!