What is DeFi and how is it changing finance?
DeFi (decentralized finance) is an ecosystem of financial applications built on blockchain. Unlike traditional banks and exchanges, DeFi platforms do not require intermediaries. Everything operates based on smart contracts, most often on the Ethereum blockchain.
Users can earn interest, take out loans, trade assets, and even participate in protocol governance through governance tokens. Some of the most popular projects in this space are Aave, Uniswap, and Compound.
The main advantages of DeFi:
Accessibility: all you need is an internet connection and a crypto wallet.
Transparency: all transactions are open and recorded on the blockchain.
Autonomy: users control their own funds, not a bank or broker.
However, DeFi is not without risks. Hacks of smart contracts, token volatility, and lack of regulation can lead to significant losses.
Nevertheless, DeFi is one of the most innovative trends of recent years, and its development could fundamentally change the financial system, making it more open and fair.
