What Is Decentralised finance?
Decentralised finance (DeFi) is an emerging financial technology that challenges the current centralised banking system.
Decentralised finance refers to a set of newly emerging financial products and services that operate on blockchains using cryptocurrency and smart contract technology. DeFi eliminates the fees that banks and other financial institutions charge, making it more accessible to anyone with an internet connection. Thus, decentralised finance is the opposite of traditional finance (TradFi).
Decentralised finance activities happen on-chain, and are protocol based where users connect with their wallets. The underlying concept that DeFi services are non-custodial without direct counterparty humans and intermediates make them very efficient.
Example decentralised finance protocols includ decentralised exchanges, like Uniswap and lending protocols like Aave. Other famous decentralised finance protocols include Curve, MakerDAO, Compound, Euler and SushiSwap.