What is DeFi? Blockchain Glossary.

DeFi has been hailed as revolutionary, but has had its fair share of blunders and frauds as well. Today we explain what it exacly is, and how it can be used for good.



DeFi stands for DEcentralized FInance; it unites all financial products built through blockchain technology and platforms into one sector.
One of the greatest flaws of traditional finance is the continuous presence of centralized institutions, third parties and intermediaries, necessary to keep our complex economy going. This has the potential to be a constant ticking timebomb, as countless examples of governments falling, making mistakes and taking their economy with them have arisen throughout history. Decentralization and finance never seemed as a feasible mix, until Blockchain Technology arrived.
The common objective is to reach a stable decentralized ecosystem which can safely replicate our traditional, centralized economy’s results, eliminating the Central Third Party “Incognita”.
Credit: Freepik


Decentralized Finance Technology largely revolves around Smart Contracts (Read our article regarding the subject to know more). Many viable products have been created, which work on topics such as:
  • Asset Management
  • Decentralized (P2P) Liquidity Providing
  • Decentralized Autonomous Organizations (DAOs)
  • Decentralized Exchanges
Understanding of the Blockchain (Read our full article) coincides with understanding of DeFi; fundamentally, it isn’t a single product but an ensemble.


DeFi has seen many negative situations, such as hacks and poor management by different project teams, which have lost a lot of user money and called into question the decentralized base that insiders claim to be present. 
There have also been many promising and functioning projects, and Sector estimates indicate this is only the beginning of its adoption and growth.