Definition
Decentralized Finance. A broad category of financial applications built on blockchain networks that operate without traditional intermediaries like banks, brokers, or exchanges.
Why It Matters
DeFi is creating an alternative financial system that is open, permissionless, and accessible to anyone with an internet connection, potentially transforming banking, lending, and investing.
Example
A user deposits cryptocurrency into Aave, a DeFi lending protocol, and earns interest without needing a bank account.
Related Terms
Liquidity Pool
Yield Farming
Smart Contract
DEX