How do you explain DeFi to your friends in a gathering❓
DeFi stands for Decentralized Finance. It attempts to recreate traditional financial services via a decentralized financial infrastructure. Think of blockchain as a distributed public ledger that records transactions.
What makes DeFi services different from their conventional counterparts? Because they are decentralized, they do certain things differently. For example:
Accessibility: You don’t need a central authority’s permission to access DeFi services like banks and credit unions require. An internet-enabled device is all you need.
Independent control: No central party or authority can reverse transactions or turn off the services. You control your assets.
Transparency: Transactions are publicly auditable. You know exactly where your money is at all times.
Trustworthiness: Transactions are enforced and governed by computer code or a “smart contract.” Basically, money is programmable according to predefined computer code, which is publically available for anyone to audit.
Decentralized Finance is appealing to many and has enormous potential. Not only is it transparent, but it also makes it easy to control and access your funds.
What is your favourite aspect of DeFi?