DeFi, or decentralized finance, refers to a system of financial applications and services built on top of a blockchain network. It aims to provide users with open, inclusive, and transparent financial services without the need for intermediaries such as banks or other centralized institutions.
DeFi platforms use smart contracts, which are self-executing contracts with the terms of the agreement directly written in code, to automate financial transactions and enforce rules without human intervention. Smart contracts enable DeFi platforms to offer a range of services, including lending, borrowing, trading, staking, and more.
Users of DeFi platforms can access these services using digital assets such as cryptocurrencies, stablecoins, or even traditional currencies. With DeFi, users maintain full control and ownership of their assets, as they are stored on the blockchain and not controlled by any central authority.
The combination of decentralized technologies, algorithmic systems, and open protocols makes DeFi services highly accessible, transparent, and secure. It also allows for greater innovation and experimentation in the financial sector, providing more opportunities for individuals to create and participate in various financial activities.
