What is Decentralized Finance?
Decentralized finance (abbreviated DeFi) is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to provide traditional financial instruments, instead rely on smart contracts on blockchains, the most common of which is Ethereum.
Why Decentralized Finance?
• Decentralized finance uses technology to eliminate the intermediaries from the centralized financial models and allows the delivery of financial services to anyone, anywhere.
• Through personal wallets and trading platforms that specifically cater to individual users rather than institutions, DeFi apps provide consumers better control over their money.
The current state of Decentralized Finance
Decentralized finance is still in its early phases of development. As of March 2021, the total value locked in DeFi contracts was more than $41 billion.