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!