Decentralized finance
We can define DeFi as a financial mechanism built using smart contracts on public blockchains aiming to provide traditional and novel financial services in a decentralized, trustless, interoperable, and permissionless manner.
While Traditional Finance (TradFi) – or Centralized Finance (CeFi) – has strived for decades to achieve efficiency and improve its services and has achieved quite a lot, DeFi however, due to the advantages of blockchain, could result in a total transformation of financial services in the future and has enabled (and is enabling and will enable) use cases that were never possible before the invention of blockchain. It is an ecosystem that has emerged as a result of the development of many different types of financial applications built on top of blockchains. With blockchains being decentralized and the applications being related to finance, the term decentralized finance emerged, or DeFi for short.
DeFi can be defined...