Arsalan Shafi
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#BinanceSquareFamily #BinanceSquareTalks #asaksocial
Decentralized Finance (DeFi) is a blockchain-based financial ecosystem that operates without intermediaries like banks, using smart contracts to automate services such as lending, borrowing, trading, and yield farming.
Built primarily on Ethereum, DeFi leverages open-source protocols for transparency and accessibility, enabling anyone with an internet connection to participate.
Key platforms include Uniswap (decentralized exchange), Aave (lending/borrowing), and MakerDAO (stablecoin issuance).
Users can earn passive income through staking or providing liquidity, but risks abound: smart contract vulnerabilities, impermanent loss, and market volatility.
Total Value Locked (TVL) in DeFi peaked at $180 billion in 2021, though hacks and scams have caused significant losses $3.7 billion in 2022 alone.
Despite regulatory scrutiny and scalability challenges, DeFi’s appeal lies in its permissionless nature and potential to democratize finance, though users must navigate technical complexity and perform due diligence to mitigate risks effectively.
Decentralized Finance (DeFi) is a blockchain-based financial ecosystem that operates without intermediaries like banks, using smart contracts to automate services such as lending, borrowing, trading, and yield farming.
Built primarily on Ethereum, DeFi leverages open-source protocols for transparency and accessibility, enabling anyone with an internet connection to participate.
Key platforms include Uniswap (decentralized exchange), Aave (lending/borrowing), and MakerDAO (stablecoin issuance).
Users can earn passive income through staking or providing liquidity, but risks abound: smart contract vulnerabilities, impermanent loss, and market volatility.
Total Value Locked (TVL) in DeFi peaked at $180 billion in 2021, though hacks and scams have caused significant losses $3.7 billion in 2022 alone.
Despite regulatory scrutiny and scalability challenges, DeFi’s appeal lies in its permissionless nature and potential to democratize finance, though users must navigate technical complexity and perform due diligence to mitigate risks effectively.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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