What Is Decentralized Finance (DeFi) and How Does It Work?
What IsDecentralized Finance ?
Decentralized Finance, or DeFi, refers to a system of financial applications and services built on decentralized blockchain networks, typically using smart contracts.
Know How Decentralized Work
DeFi applications are built on decentralized blockchain platforms, primarily Ethereum.
DeFi applications utilize smart contracts, which are self-executing agreements written in code. These contracts automatically execute predefined actions when specific conditions are met.
DeFi allows users to transact directly with one another without intermediaries.
Lending and Borrowing:
DeFi platforms enable users to lend their cryptocurrencies or digital assets and earn interest on their holdings. .
Decentralized Exchanges (DEXs):
DeFi introduced decentralized exchanges that allow users to trade cryptocurrencies directly with one another.
Yield Farming and Staking:
DeFi platforms offer opportunities for users to earn additional rewards by participating in yield farming and staking.
Governance and Decision-making:
Many DeFi protocols are governed by decentralized autonomous organizations (DAOs).