DeFi is an abbreviation of the phrase decentralized finance which generally refers to the digital assets and financial smart contracts, protocols, and decentralized applications (DApps) built on Ethereum. In simpler terms, it’s financial software built on the blockchain that can be pieced together like Money Legos. Computers have disrupted nearly every industry over the years. Each innovation builds on the previous one, and digital products and services become more sophisticated. Through technology, we’ve catered the world to fit our needs. From digital assistants to home automation, programs now affect many aspects of your daily life.
Decentralized finance aims to create a financial system that’s open to everyone and minimizes one’s need to trust and rely on central authorities. Technologies like the internet, cryptography, and blockchain give us the tools to collectively build and control a financial system without the need for central authorities.There’s a saying in the blockchain space: “Don’t trust, verify.” Because with a blockchain network, you as an individual can verify any and every transaction that occurs on the blockchain.