Introduction to Decentralized Finance
Decentralized Finance, commonly known as DeFi, represents a paradigm shift in the financial industry. By leveraging blockchain technology, smart contracts, and interoperable networks, DeFi aims to democratize traditional financial services like lending, borrowing, and trading. In this article, we’ll explore the real-world applications of DeFi, review popular platforms, and offer strategic insights on navigating this transformative space.
How DeFi Works
At its core, DeFi employs smart contracts — self-executing agreements coded on blockchains — to eliminate intermediaries and automate financial services. This enables greater transparency, security, and accessibility, allowing users to transact directly with one another. Key components include decentralized exchanges (DEXs), lending protocols, and stablecoins. ❇️