Decentralized Finance (DeFi) is an open and global financial system built on blockchain technology (like Ethereum), providing a decentralized alternative to traditional financial systems. It features products that allow borrowing, saving, investing, and trading without the need for a central intermediary. It relies on open-source technology, where funds are fully controlled by users, with access available to anyone with an internet connection.
Key features of DeFi:
- Full control: The user owns their money and decides how to use it.
- 24/7 Availability: Markets are always open without time or geographical restrictions.
- Transparency: All operations are verifiable through open-source code.
- Speed: Money transfers occur within minutes.
- Privacy: Transactions are mostly anonymous.
Problems of traditional finance addressed by DeFi:
- Exclusion of categories from financial services.
- Slow transactions (days) and hidden fees.
- Control of central institutions and closure of markets at will.
- Linking personal identity to financial activity.
Real-world use cases:
- Escape from inflation (like in Argentina).
- Real-time salary payments.
- Massive loans without the need for identity verification.
Quick comparison with traditional finance:
DeFi Traditional Finance
User control | Funds managed by institutions |
| Instant transactions | Transactions that may take days |
| Does not require identity | Linked to user identity |
| Open to all | Terms and restrictions for access |
| Completely transparent | Closed and invisible systems |
DeFi represents a revolution in the financial sector, enhancing inclusivity and efficiency, and reducing reliance on centralized intermediaries.
