What is DeFi?

Decentralized finance is a collection of financial services that are an alternative to the current financial system.

While the traditional financial sector is opaque, tightly controlled and outdated, DeFi empowers individuals by providing them with more personal control over their finances. DeFi applications enable individuals to borrow, save, invest and trade without having to rely on third parties like banks, exchanges or lending institutions. It’s able to do this because it’s built on blockchain technology, making use of cryptocurrencies and smart contracts which can execute transactions automatically and instantaneously.

DeFi solves many problems within the traditional financial system. For a start, it makes financial services more accessible and inclusive. This is significant because it enables over 1.7 billion people, who were previously excluded, to have access to a safe and secure financial industry.

On top of that, DeFi is much faster and more efficient than traditional financial services because applications are powered by smart contracts. This removes the requirement for intermediaries, which removes a lot of the incurred costs associated with financial services.

DeFi applications can be accessed 24/7, anywhere in the world, meaning that individuals are not limited to operating on and at specific dates and times or in specific time zones.