What is DeFi? ⠀
Decentralized Finance (DeFi) is a financial instrument in the form of blockchain—based applications and protocols.
The main idea of DeFi is to modernize the existing financial infrastructure (banks, exchanges, insurance companies, etc.). With the help of DeFi, finance becomes available to anyone, and any financial issues are not affected by regulators and the human factor
DeFi projects build their technologies on the basis of first-level blockchains, such as Ethereum, BNB and Solana.
We talked about blockchain levels in more detail in this post!
DeFi includes such decentralized services (and not only):
•
Lending - services that allow users to borrow and borrow crypto assets.
•
Exchangers - provide users with the opportunity to exchange cryptocurrencies without the participation of centralized exchanges.
•
Smart Wallets - wallets and DeFi portfolio managers with advanced management functions.
•
Payments - decentralized payment protocols.
•
Insurance - minimization of risks when storing assets.
Since DeFi services operate
without intermediaries, they often receive liquidity (read: money) to provide services from volunteer liquidity providers. The latter protocols are awarded with special tokens, which is why the practice of profitable farming has appeared.
Do you think DeFi tools will be able to replace the usual banking system?
Of course -
So far, it's just a fantasy -
Crypto_Ocean
