Meaning ● Decentralized Finance Protocols (DeFi) in the SMB context represent a shift towards accessible and automated financial services, bypassing traditional institutions. Specifically, for SMBs, this means leveraging blockchain-based systems for streamlined lending, borrowing, and investment opportunities. Automation becomes possible through smart contracts, enabling processes such as automated invoice discounting or supply chain finance solutions. These protocols further allow for increased financial inclusion, granting access to global capital markets and reducing reliance on local banks, which may have stringent requirements. Implementation involves integrating DeFi solutions into existing accounting and ERP systems to enhance efficiency and transparency, ultimately contributing to business growth by optimizing financial operations and accessing new funding avenues. ● Embracing DeFi can mitigate risks associated with conventional financing, however, it also requires SMBs to manage new challenges related to regulatory compliance and the volatility inherent in cryptocurrency markets.
