WHAT IS DEFI ????

DeFi is the abbreviation for Decentralized Finance. It refers to an ecosystem of financial applications built on blockchain technology, especially on the Ethereum network.

Main Features of DeFi

Decentralization: There are no intermediaries like banks or financial institutions. Transactions and contracts are executed automatically through smart contracts.

Accessibility: Anyone with an internet connection can access financial services, without the need for approval from centralized entities.

Transparency: All transactions are visible on the blockchain, which increases transparency and reduces the risk of fraud.

Common Applications of DeFi

Lending and Borrowing: Platforms like Aave and Compound allow users to lend and borrow cryptocurrencies without intermediaries.

Decentralized Exchanges (DEX): Uniswap and SushiSwap allow the exchange of cryptocurrencies directly between users.

Stablecoins: Cryptocurrencies like DAI are designed to maintain a stable value and are used in various DeFi applications.

Advantages and Risks

Advantages: Greater control over assets, lower transaction costs, and global access to financial services.

Risks: Vulnerabilities in smart contracts, market fluctuations, and lack of regulation can pose significant risks.