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What Is DeFi (Decentralized Finance)?
DeFi offers trading, lending and earning through smart contracts instead of banks. Understand the benefits and the real risks.
The idea
Decentralized finance replaces middlemen with smart contracts, programs on a blockchain that execute automatically. You connect a wallet and interact with protocols directly.
Common DeFi services
People use DeFi to swap tokens on decentralized exchanges, lend or borrow against crypto collateral, earn fees by providing liquidity, and trade derivatives.
Benefits
DeFi is open to anyone with a wallet, runs around the clock and is transparent because the code and transactions are public.
Risks
Smart-contract bugs and hacks can drain funds, prices can move against collateral and trigger liquidation, and there is usually no customer support or insurance. Fake tokens and phishing sites are common.
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Educational content only, not financial advice. Crypto assets carry a high risk of loss.
Keep learning
Look up unfamiliar words in the crypto glossary or browse coin markets.