DeFi stands for decentralized finance. It refers to financial tools built with blockchains and smart contracts instead of traditional banks or brokers.
What DeFi includes
DeFi apps can support trading, lending, borrowing, saving, insurance-like products, and liquidity pools. Users usually interact through a crypto wallet.
Why DeFi is different
Many DeFi systems are open to anyone with a wallet and internet connection. They can be transparent because transactions and contract code may be visible on the blockchain.
DeFi also carries serious risks, including smart contract bugs, scams, unstable tokens, liquidations, and confusing fees. It should be used carefully, especially by beginners.