What is DeFi?
DeFi is a peer-to-peer financial system built on blockchain technology. It removes the need for traditional intermediaries like banks by using smart contracts and decentralized applications (DApps).
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How It Works:
1. User Retains Control of Funds – Users manage their assets directly via wallets.
2. Access via DApps – Financial services (like borrowing, trading, etc.) are provided through decentralized apps.
3. Blockchain Transactions – All transactions are recorded and secured on the blockchain.
4. No Intermediaries Needed – Services are open, permissionless, and often automated via code.
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Advantages:
Accessible – Open to anyone with internet access.
Programmable – Features and logic are coded into smart contracts.
Transparent – Activities and rules are publicly visible on the blockchain.
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Famous Use Cases:
Lending – Earn interest or borrow crypto directly.
Decentralized Exchanges (DEXs) – Trade tokens without a central authority.
Stablecoins – Digital currencies pegged to stable assets (e.g., USD).
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