#DeFiGetsGraded DeFi, short for Decentralized Finance, refers to a financial system that operates on blockchain technology, eliminating the need for traditional intermediaries like banks and brokers. It provides a wide range of financial services, including lending, borrowing, trading, and insurance, in a decentralized and permissionless manner.

*Key Characteristics of DeFi:*

- *Decentralized Governance*: DeFi operates without a central authority, allowing for peer-to-peer transactions and community-driven decision-making.

- *Permissionless Access*: Anyone with an internet connection can access DeFi services, promoting financial inclusion and accessibility.

- *Transparency and Security*: DeFi transactions are recorded on a public blockchain, ensuring transparency and security through cryptography.

- *Smart Contracts*: Self-executing contracts with predetermined rules govern DeFi transactions, automating processes and minimizing the need for intermediaries.¹

*DeFi Applications:*

- *Decentralized Exchanges (DEXs)*: Platforms like Uniswap and SushiSwap enable users to trade digital assets without intermediaries.

- *Lending and Borrowing*: