Decentralized finance (DeFi), refers to a new financial system built on blockchain technology that operates independently of traditional financial intermediaries, such as banks and governments.
DeFi offers a wide range of financial products and services, such as lending and borrowing, trading, and insurance, all powered by smart contracts on blockchain networks. Because DeFi operates on decentralized, open-source platforms, it offers greater transparency, security, and accessibility for users compared to traditional financial systems.
This new type of finance has gained significant traction in recent years, attracting both individual and institutional investors looking for new investment opportunities and greater control over their finances. Despite its growing popularity, DeFi also faces challenges, such as regulatory uncertainty, scalability issues, and the risk of hacking and other security breaches.
This topic is particularly relevant given the ongoing evolution of the cryptocurrency and financial industries and the increasing interest in decentralized solutions for various problems and applications.