#DeFiGetsGraded Decentralized Finance (DeFi) refers to blockchain-based financial systems that operate without traditional intermediaries like banks. Instead, they use smart contracts—self-executing code on blockchains such as Ethereum—to enable lending, borrowing, trading, and earning interest directly between users. DeFi platforms are typically open-source, transparent, and accessible to anyone with an internet connection. They use cryptocurrencies or stablecoins as mediums of exchange, allowing for fast, borderless transactions. While DeFi offers higher potential returns and greater control over assets, it also carries risks such as hacking, smart contract bugs, and volatile markets. In essence, DeFi democratizes finance by replacing trust in institutions with trust in code.