What is Decentralized Finance (Defi) ?
Decentralized finance (DeFi) is an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies.
Decentralized finance (DeFi) is an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies. The system removes the control banks and institutions have on money, financial products, and financial services.
“DeFi is an open and global financial system built for the internet age - an alternative to a system that’s opaque, tightly controlled, and held together by decades-old infrastructure and processes. It gives you exposure to global markets and alternatives to your local currency or banking options. To this day 10’s of billions of dollars worth of crypto have flowed through DeFi applications.”
Key Attractions of DeFi
- It eliminates the fees that banks and other financial companies charge for using their services.
- You hold your money in a secure digital wallet instead of keeping it in a bank.
- Anyone with an internet connection can use it without needing approval.
- You can transfer funds in seconds and minutes.
Examples of Decentralized Finance (Defi)
Although there currently exist more than 10,000 cryptocurrencies, the most famous examples are:
Bitcoin is a consensus network that enables a new payment system and digital currency. It is the first decentralized peer-to-peer payment network that is powered by its users and has no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.
Ethereum is a community-run technology powering the cryptocurrency ether (ETH) and thousands of decentralized applications.
Solana is a decentralized blockchain built to enable scalable, user-friendly apps for the world.