$ETH Ethereum and Decentralized Finance (DeFi)

Decentralized Finance (DeFi) is one of the most influential applications in the Ethereum ecosystem. DeFi utilizes Ethereum's smart contracts to create financial services that do not require traditional financial institutions, such as lending, trading, and derivatives. In 2020, the DeFi craze exploded, with the total value locked (TVL) in assets on Ethereum surpassing $100 billion at one point. DeFi protocols like Uniswap, Aave, and Compound allow users to engage in decentralized trading, lending, or earning interest directly without banks or intermediaries. Ethereum's high flexibility and the support of the developer community are key to the rise of DeFi. However, DeFi also faces challenges, such as high transaction fees (Gas fees) and security issues caused by smart contract vulnerabilities. Nevertheless, Ethereum remains the core infrastructure of DeFi, continually driving the decentralized revolution in the financial sector.