Ethereum (ETH), the world's second-largest blockchain project, has paved the way for the emergence of revolutionary new technologies. One of these is DeFi.

DeFi, short for Decentralized Finance, refers to a set of financial services and products such as loans, transfers, and payment systems that operate on a blockchain, a type of decentralized and immutable database. Typically, these solutions are not controlled by intermediaries such as banks or other financial institutions.

Operations on DeFi protocols are described and executed by algorithms and smart contracts, which are self-executing computer programs. A practical example to understand how they work is a loan:

An individual can borrow money from another person in a peer-to-peer transaction. The terms of transfer, amounts, interest rates, collateral, and all details are predefined in these automated contracts and executed by them. There is no need to rely on a bank or another entity with its hefty fees to intermediate the operation.

Therefore, the main goal of this technology is to create a global decentralized financial system that is independent, cost-effective, less bureaucratic, and accessible to everyone.

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