Decentralized Finance (DeFi)

What is Decentralized Finance (DeFi)?

Short answer:

Decentralized Finance refers to financial products that let users to trade with each other securely, without a ‘middle man’.

DeFi products allow users to trade cryptocurrencies, make loan agreements and pay for goods and services, without the need for a trusted third party (i.e. banks).

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!