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Decentralized finance (DeFi), is a financial system that runs on blockchain technology.

Technical details

DeFi is designed to be open, transparent, and permissionless, so that anyone can participate without the need for a central authority. DeFi applications are built on top of smart contracts, which are self-executing contracts that run on the blockchain. This allows for trustless transactions and eliminates the need for intermediaries, such as banks or brokerage firms.

Main advantages of DeFi are:

  • Openness: DeFi is open to anyone, regardless of their location or financial status.
  • Transparency: All transactions are recorded on the blockchain, which makes them transparent and auditable.
  • Efficiency: Transactions are typically faster and cheaper than traditional financial transactions.
  • Security: DeFi is secured by cryptography, which makes it very difficult to hack.

Some examples of DeFi applications on Web3 are:

  • Decentralized exchanges (DEXs) allow users to trade cryptocurrencies and tokens without the need for a central authority.
  • Lending and borrowing protocols: These protocols allow users to lend and borrow cryptocurrencies and tokens from each other.
  • Staking and yield farming: These protocols allow users to earn rewards for locking up their cryptocurrencies and tokens.
  • Derivative markets: These markets allow users to trade derivatives, such as futures and options, on cryptocurrencies and tokens.

External links

DeFi Pulse: This website provides a comprehensive overview of the DeFi ecosystem, including data on different DeFi applications, protocols, and tokens.

DeFi Prime: This website provides educational resources about DeFi, including articles, guides, and tutorials.

DeFi subreddit: This subreddit is a great place to learn about DeFi and to ask questions about specific DeFi applications.