meaning of defi

An acronym for Decentralized Finance, referring to a global, open-source financial system built on blockchain technology (primarily Ethereum) that operates without central intermediaries like banks, brokerages, or exchanges. DeFi utilizes smart contracts to automate financial services such as lending, borrowing, trading, and insurance, aiming to provide more accessible and transparent financial services.

Many investors are exploring DeFi platforms for lending and borrowing cryptocurrencies without traditional financial institutions.

The rapid growth of DeFi has introduced new paradigms for financial transactions, challenging established banking models.

Etymology: An abbreviation of 'Decentralized Finance,' a term that gained prominence in the late 2010s to describe the emerging ecosystem of financial applications built on blockchain networks.

Cultural Notes: DeFi represents a significant movement within the cryptocurrency and blockchain space, aiming to democratize finance and create a more inclusive and transparent financial system. It's often seen as a disruptive force to traditional finance, emphasizing peer-to-peer transactions and algorithmic governance. Its development is closely tied to the evolution of smart contract platforms and the broader Web3 movement.

Common Phrases: DeFi protocols, DeFi platforms, DeFi ecosystem, DeFi lending

Word Frequency: common

Category: crypto

Language: English

Pronunciation: /ˈdiːfaɪ/