Decentralized finance, or “DeFi,” is a new financial system built on blockchain technology that allows for financial transactions to occur without the need for a central authority. It provides transparency, security, and accessibility in the financial system. DeFi uses smart contracts on a blockchain network to facilitate transactions and manage assets. It enables individuals to access financial services without the need for traditional intermediaries, such as banks, and can help to reduce costs and increase access to financial services for people.
DeFi allows individuals to earn interest on their assets by lending them to borrowers on lending platforms, and it opens up new opportunities for investment and ownership by allowing tokenization of real-world assets. It is controlled and owned by the community of users and developers that use and build on the DeFi platform and it is governed through decentralized autonomous organizations (DAOs) which are run by smart contracts on the blockchain.
In short, DeFi is a new financial system built on blockchain technology that provides transparency, security, and accessibility in the financial system. It offers a wide range of financial services and creates new opportunities for individuals to access and participate in the financial system.
This page was last updated on January 12, 2023.