the FTX collapse will spur big innovation in DeFi and crypto Read the full article here Ask us about it [email protected] ⭐️ Join us on telegram ⭐️
DeFi - a compendium of knowledge about decentralized finance
What is DeFi in crypto? We can say that DeFi (short for decentralized finance) is a concept that defines an entirely new area of development in the financial sector. In this context, it refers to a whole range of financial services that are based on the blockchain system and smart contracts using this technology.
The definition of DeFi wouldn't be complete if we didn't add that decentralized finance removes barriers typical of traditional financial services - such as credit scoring or banks' increasingly high margins when granting loans. But, at the same time, DeFi simplifies all procedures - all we need to gain access to the world of decentralized finance is a smartphone or other mobile device or computer connected to the network.
How does DeFi work?
Financial services in the DeFi sector are implemented on public blockchains. This makes it possible to bypass the central financial intermediaries that function in traditional finance. We are talking about banks, stock exchanges or brokerage offices.
With no central authority, users of a given system have complete control over their finances. They can therefore conduct exchanges and all interactions in a peer-to-peer (P2P) spirit, with the help of decentralized applications, collectively referred to as dApps.