What is DeFi?
Defi Stands for decentralized finance and is a type of financial system which allows people to make seamless financial transactions, including money transfer payments etc., without depending on banks and other central entities. Defi ecosystem builds financial applications based on a blockchain technology named DLT (distributed ledger technology). To facilitate financial transactions, Defi system utilizes smart contracts based on a new technology named Ethereum blockchain for automatically verifying and processing digital transactions.
The main purpose of DFI is to facilitate quick and easy access to all digitalized financial solutions and services, specifically for the people who live in remote locations and lack financial services. Different types of DFI apps range from different financial instruments to several platforms for lending or borrowing, decentralized apps or DApps, stable coins etc. The traditional finance system depends on banks and other financial intermediaries to process the transactions; however, with the introduction of Defi, a quick solution to carry out financial transactions can be provided without depending on any middleman.