What does defi mean in the currency circle?

DeFi (decentralized finance) refers to a financial platform built on the blockchain, which has the characteristics of decentralization, transparency, openness and smart contracts. DeFi has emerged due to dissatisfaction with traditional finance, the rise of blockchain technology, innovative financial instruments, and high-yield potential. Application areas include lending, trading, stablecoins, and derivatives.

The meaning of DeFi in the currency circle

DeFi (decentralized finance) refers to financial services and platforms built on blockchain technology, bypassing traditional financial intermediaries and providing services similar to traditional finance Serve.

Outstanding features of DeFi:

• Decentralization: There is no central control agency and it is managed and operated by a distributed node network.
• Transparency: All transactions and data are recorded on the immutable blockchain, ensuring transparency and auditability.
• Openness: Anyone can access and use DeFi services without geographical or regulatory restrictions.
• Smart contracts: Automate financial transactions and processes to ensure the accuracy and credibility of operations.

Reasons for the popularity of DeFi:

• Dissatisfaction with traditional finance: Traditional financial institutions usually have high handling fees, high entry barriers and low efficiency.
• The rise of blockchain technology: The security and transparency provided by blockchain have laid the foundation for the development of DeFi.
• Innovative Financial Tools: DeFi introduces new financial tools and services such as lending, liquidity mining, and derivatives trading.
• High Yield Potential: DeFi platforms often provide users with higher yields than traditional investments.

DeFi Applications:

• Lending: Allows users to lend or borrow cryptocurrencies without the intervention of a bank or credit institution.
• Trading: Provides a decentralized cryptocurrency exchange where users can buy and sell assets without a middleman.
• Stablecoins: Cryptocurrencies pegged to fiat currencies, providing stability to the DeFi ecosystem.
• Derivatives: Allow users to speculate and hedge risks on cryptocurrency assets.

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