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Decentralized Finance (DeFi): What is this funny term?
Since Bitcoin’s revolutionary launch in 2009, the crypto and blockchain industry has evolved into a sprawling ecosystem filled with innovation and opportunity. Within this space, various niches have emerged, each catering to different aspects of the digital and financial world. One of the most transformative of these niches is decentralized finance, or DeFi. Born as a radical alternative to traditional financial services, DeFi leverages smart contracts, decentralized applications (DApps), and blockchain technology to build an open and inclusive financial system.
DeFi is more than just a buzzword; it’s a movement toward reshaping how we interact with money. Initially, the DeFi ecosystem blossomed on the Ethereum blockchain, and even today, a significant portion of DeFi’s total value locked (TVL) remains on Ethereum. However, DeFi is now a cross-chain phenomenon, pushing the boundaries of what’s possible in finance.
What is DeFi?
At its essence, DeFi is a subset of the broader crypto space that offers financial services in a decentralized manner, meaning it’s controlled by its participants rather than a centralized authority. DeFi platforms provide users with access to various financial services, including lending, borrowing, saving, trading, investing, and more — all without the need for…
