Decentralized Finance (DeFi)

Financial services offered on open blockchains, especially Ethereum, are referred to as DeFi (or “decentralized finance”). Earning interest, borrowing money, lending money, purchasing insurance, trading derivatives, trading assets, and other activities are all possible with DeFi. Still, the process is quicker and doesn’t involve any formalities or a third party. DeFi is global, peer-to-peer (meaning directly among two people, not directed through a centralized system), pseudonymous, and available to everyone, much like cryptography in general.

DeFi is built on the fundamental idea of Bitcoin, which is digital money, to create a full-fledged digital alternative to Wall Street without any accompanying fees (think office towers, trading floors, banker salaries). This could lead to more accessible financial markets that are open, free, and fair to everyone with an internet connection.

The evolution of decentralized finance is still in its infancy. Moreover, it is unregulated; thus, there are still plenty of infrastructure blunders, hacks, and scams in the ecosystem.

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