What is DeFi?

DeFi is short for decentralized finance and refers to an all-inclusive ecosystem of applications, financial services, and other financial infrastructures that operate within the key principles of privacy, transparency, neutrality, and sovereignty. DeFi tools are openly accessible and operate utilizing blockchain technology. DeFi and decentralized finance will be a game-changer for the financial world and the global economy as we know it.

Decentralized finance includes a wide spectrum including digital assets, smart contracts, and dApps (decentralized Apps) which are built on blockchain technology. Considering the amount of development and flexibility involved, the Ethereum platform is currently the foremost choice for DeFi applications.

Imagine an open financial system in which financial tools and services can be built in a decentralized manner. Since these applications are always built utilizing blockchain technology, the data can easily be verified.

With the use of decentralized technology like smart contracts, DeFi has led to the elimination of middlemen, which have long plagued finance unnecessarily. This has created favorable situations where:

One can get access to instant loans without the need for paperwork sans any bank approval.

One can earn real interest with their assets without the need to sacrifice them due to the prevailing low-interest rates.

Quick issuance of company stocks without the need for banks to intervene thereby saving one from exorbitant bank fees.