What is Decentralized Finance (DeFi)?

Short answer:

DeFi refers to a financial system, built on blockchain technology, that lets people make transactions, earn interest, borrow, and lend money without relying on traditional banks or financial institutions.

It uses smart contracts to automate processes and ensure security.

Extended answer:

Here’s an over simplified, semi-visual example…

A normal financial transaction might see money flow like this: customer → bank → merchant

Whereas a DeFi transaction might see money flow like this: customer → merchant

(I.e. No middle man)

Pretty cool!