Decentralized Finance (DeFi) is a system of financial services built on blockchain technology that operates without traditional intermediaries such as banks or brokerages. DeFi applications use smart contracts, primarily on networks like 📝Ethereum, to facilitate lending, borrowing, trading, and other financial activities in a decentralized manner. This ecosystem gained momentum in 2019 and 2020 with the rise of decentralized exchanges, lending protocols, and yield farming opportunities. DeFi distinguishes itself from conventional finance by offering open access—anyone with an internet connection can participate—and by allowing users to maintain custody of their assets. Key innovations include automated market makers, liquidity pools, and tokenized assets, which enable new forms of peer-to-peer interaction. The sector has attracted billions of dollars in total value locked, but it has also faced scrutiny over issues such as scalability, regulatory uncertainty, and risks from smart contract vulnerabilities or governance flaws. Despite these challenges, DeFi remains a rapidly evolving field within the broader 📝Cryptocurrency and 📝blockchain technology landscape.
