DeFi — short for Decentralized Finance — is a growing movement that uses blockchain technology to recreate traditional financial systems without banks or brokers.

In DeFi, everything is powered by smart contracts instead of institutions. Anyone with an internet connection can access services that once required approvals, paperwork, or middlemen.

Examples of DeFi use cases:

• Lending/borrowing: Earn interest or take out loans without credit checks (e.g., Aave, Compound)

• Staking and yield farming: Put your assets to work and earn rewards

• Swapping assets: Use decentralized exchanges (DEXs) to trade tokens instantly

• Stablecoin saving accounts: Earn interest in crypto pegged to fiat currencies

Key principles of DeFi:

• Open access: Anyone can participate — no KYC required in many protocols

• Transparency: Code is public; you can verify how it works

• Non-custodial: You keep control of your funds; no third-party holds your assets

But with great freedom comes risk:

• Smart contract bugs

• Impermanent loss

• Rug pulls (fraudulent projects)

Still, DeFi offers a vision of a more accessible and programmable financial system, where users — not institutions — are in control.