Finance glossary
DeFi
Definition
Decentralized Finance, financial services built on blockchain without intermediaries.
DeFi replicates traditional financial services like lending, borrowing, and trading using smart contracts on blockchains like Ethereum. There are no banks or middlemen; users interact directly with protocols. Benefits include permissionless access and transparency; risks include smart contract vulnerabilities and regulatory uncertainty.
In a sentence
Instead of a bank, she lent her crypto through a DeFi protocol and earned interest directly from borrowers.
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