What is DeFi?
Decentralized finance, or DeFi (also called open finance), is a blanket term for financial services like borrowing, lending, and trading built using decentralized infrastructure, such as public blockchains and smart contracts.
In 2019, it has quickly emerged as Ethereum’s next big use case after ICOs in 2017 (ICOs, also known as initial coin offerings, are when blockchain projects sell crypto tokens to raise funds for their projects’ development).
Decentralized Finance
By using decentralized technology like smart contracts, which you can think of as self-executing contracts made of computer code, DeFi allows for the elimination of middlemen.
- Imagine near-instantaneous loans without the need of bank approval or paperwork.
- Imagine earning real interest on your assets, instead of suffering from low, no, or even negative interest rates.
- Imagine being able to issue stock for your company without having to deal with bankers and lawyers who charge exorbitant fees.
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