Decentralized finance or ” DeFi” is an emerging digital financial infrastructure that theoretically eliminates the need for a central bank or government agency to approve financial transactions.
Considered by many to be the umbrella term for a new wave of financial services innovation, DeFi is closely tied to blockchain – the distributed, decentralized, immutable public ledger on which Bitcoin is based – which allows all computers (or nodes) on a network to keep a copy of the transaction history …… The idea is that no single entity can control or change that transaction record.
Most of the financial services that can be defined as DeFi can be found on the second largest cryptocurrency marketplace, the ethereum network, which also acts as a platform on which other blockchain applications are built (ethereum’s crypto ether, used to pay for transactions). Using decentralized applications or dApps, two or more parties can exchange, lend and trade directly using blockchain technology and smart contracts, without the involvement and cost of intermediaries.
