What does decentralized finance defi do?

Decentralized Finance (DeFi) is a system that uses blockchain technology to provide financial services without the need for traditional financial institutions. DeFi improves the accessibility and transparency of financial services through smart contracts. Its advantages include: 1. Accessibility: open to people with Internet; 2. Transparency: all transactions are recorded on the public blockchain; 3. Efficiency: automated finance process, reducing time and costs; 4. Security: Distributed blockchain networks improve security. DeFi applications include lending, exchanges, derivatives, stablecoins, and insurance.

What is decentralized finance (DeFi)?

Decentralized Finance (DeFi) is an emerging financial system that uses blockchain technology to provide traditional financial services without the participation of traditional financial institutions. Simply put, DeFi aims to increase the accessibility and transparency of financial services by transferring financial power from centralized institutions to individuals.

How DeFi works

DeFi applications are built on the blockchain network and allow users to interact directly with smart contracts. A smart contract is a piece of code stored on the blockchain that can automatically execute predefined terms . By eliminating the middleman, DeFi removes many of the friction points in traditional finance, making transactions faster, cheaper, and more secure.

Advantages of DeFi

• Accessibility: DeFi services are open to anyone with an internet connection, regardless of geographic location or financial status.
• Transparency: All transactions are recorded on a public blockchain, ensuring transparency and accountability.
• Efficiency: DeFi automates financial processes, reducing processing time and costs.
• Security: The distributed nature of the blockchain network provides enhanced security against unauthorized access.

DeFi Apps

DeFi offers a wide range of financial services, including:

• Lending: Borrow or lend cryptocurrencies from the platform
• Exchanges: Decentralized exchanges allow users to trade crypto directly Currencies
• Derivatives: Contracts that allow users to speculate on the value of crypto assets
• Stablecoins: Cryptocurrencies pegged to fiat currencies, providing price stability
• Insurance: Protect crypto assets from Loss or theft

The above is the detailed content of What does decentralized finance defi do?. For more information, please follow other related articles on the PHP Chinese website!