What is DeFi?
DeFi (Decentralized Finance) refers to a set of financial services built on blockchain networks that operate without traditional intermediaries like banks, enabling permissionless lending, trading, and earning.
What is DeFi?
Decentralized Finance, or DeFi, is an umbrella term for financial applications built on public blockchains — primarily Ethereum — that aim to recreate and improve upon traditional financial systems without central intermediaries.
Core DeFi Applications
- Decentralized Exchanges (DEXs): Trade tokens directly from your wallet (e.g., Uniswap, Curve).
- Lending Protocols: Borrow or earn interest on crypto (e.g., Aave, Compound).
- Yield Farming: Earn returns by providing liquidity to protocols.
- Stablecoins: Algorithmic or collateral-backed stable assets (e.g., DAI).
Total Value Locked (TVL)
TVL is the key metric for DeFi — it measures the total amount of assets deposited in DeFi protocols. At peak, TVL exceeded $180 billion.
Risks in DeFi
Smart contract bugs, rug pulls, impermanent loss, and oracle manipulation are real risks. Always research protocols before depositing funds.