Blockchain

DEFI

At the heart of cryptocurrencies is a remarkable history of innovation dating back to the 1980s, with advances in cryptography. Since then, a series of events have shaped the crypto space; the first cryptocurrency, Bitcoin, is the most prominent. Despite its spectacular growth over the past 12 years, financial services for bitcoin have emerged very slowly - largely due to its inherent lack of stability and adoption. Mainstream institutions do not accept bitcoin lending due to its significant price volatility — it makes bitcoin a bad commodity to accurately plan for investments.

Things are changing fast in the crypto space, and decentralized finance (DeFi) is a trend of the moment — it's undoubtedly an exciting space. If you are still unaware, let's dive a little deeper into DeFi and learn more about it.

Decentralized finance (DeFi) explained DeFi, short for decentralized finance, is an umbrella term for a variety of applications and projects in the public blockchain space that aim to disrupt traditional finance. Inspired by blockchain technology, DeFi is described as a financial application based on blockchain technologies, typically using smart contracts. Smart contracts are automatically enforceable agreements that do not require intermediaries to execute and can be accessed by anyone with an internet connection.

DeFi consists of applications and peer-to-peer protocols developed on decentralized blockchain networks that do not require access rights for simple lending, borrowing or trading of financial instruments. Most DeFi applications today are built using the Ethereum network, but many alternative public networks are emerging that offer superior speed, scalability, security, and lower costs.