What is DeFi: Decentralized Finance Explained
DeFi (Decentralized Finance) is a financial system without banks — lending, trading, and earning yield through smart contracts. Code is the rule, not institutions.
TL;DR
DeFi (Decentralized Finance) is a financial system without banks — lending, trading, and earning yield through smart contracts. Code is the rule, not institutions.
DeFi Core Concepts
DeFi is the ecosystem of financial applications built on blockchain (primarily Ethereum). Core components: DEX (Decentralized Exchange): no registration, trade directly from your wallet — Uniswap, Curve. Lending protocols: Aave, Compound — deposit assets to earn interest or borrow against collateral. Liquidity Mining (LP): provide two tokens to a pool, earn trading fees + protocol incentives. Yield Aggregators: Yearn Finance — auto-optimizes yield across protocols. Biggest difference from TradFi: no gatekeeping (anyone can participate), non-custodial (you hold your keys), transparent (code is public).