DeFi (short for "Decentralized Finance") is a set of financial applications and services built on blockchains, especially on Ethereum, that allow financial operations without traditional intermediaries like banks or brokers.
What does DeFi allow you to do?
With DeFi you can:
Borrow and lend money to other users with cryptocurrencies.
Earn interest by leaving your cryptos in liquidity protocols.
Exchange tokens without using centralized exchanges (like Binance or Coinbase), using DEXs like Uniswap or PancakeSwap.
Participate in decentralized insurance, financial derivatives, and much more.
How does it work?
Instead of relying on institutions, DeFi uses smart contracts, which are self-executing programs that run on the blockchain and ensure that the rules are enforced without the need for trust between parties.
Advantages:
Open to anyone with internet access.
Transparent (all the code is public).
No centralized control.
Risks.
Vulnerabilities in smart contracts.
Volatility of tokens.
Possibility of fraud or unregulated schemes.
Blessings and success
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