Decentralized Finance, commonly referred to as DeFi, is an emerging financial technology that operates on secure distributed ledgers similar to those used by cryptocurrencies. DeFi aims to democratize finance by replacing traditional centralized financial intermediaries such as banks, brokers, and exchanges with decentralized platforms.
These platforms enable users to lend, borrow, trade, and earn interest on their assets through smart contracts. DeFi platforms are typically open-source, transparent, and accessible to anyone with an internet connection. They offer a wide range of financial services, including stablecoins, decentralized exchanges, lending platforms, and yield farming. DeFi has gained significant traction due to its potential to offer more inclusive financial services, though it faces challenges related to scalability, regulatory compliance, and security vulnerabilities.