Previous:
Decentralized Finance 101 in 15 minutes
Next:
DeFi is really f*cking scary. But it’s the fastest growing industry in the world. You do not want to fall behind the 8 ball. Read this 4 minute page to stay ahead of the curve:
A Quick Definition
DeFi (aka decentralized finance) aims to be today’s financial system with code replacing institutions.
*It won’t completely replace traditional finance. But, many aspects of it will be disrupted.
In DeFi, blockchains (and smart contracts) replace the financial institution as the middleman who guarantees a transaction will happen (ex: a loan will be paid). Smart contracts are public for anyone to inspect and audit, keeping users accountable from writing bad contracts.
Now let’s tie it all together with an analogy:
<aside> 🪜 You can think of DeFi in layers:
(source: Ethereum Foundation)