Decentralised Finance, or DeFi, is a set of financial applications built on blockchain networks that let people lend, borrow, trade and earn without banks or brokers. Smart contracts handle the transactions automatically.

How it works

Because it is open and permissionless, anyone with a wallet can use most DeFi services directly. There are no account applications or approvals in the traditional sense.

Risks to understand

That openness comes with real risks, including bugs in code, scams and sharp price swings. DeFi is one of the fastest moving parts of crypto, so tools and terms change quickly.