Decentralized finance (DeFi) is a new financial model that uses distributed ledger technologies to provide services such as lending, investing, and exchanging crypto assets without the need for a traditional centralized intermediary. Instead, DeFi leverages the security and transparency of blockchain technology to facilitate peer-to-peer transactions and smart contracts that are executed automatically, without the need for intermediaries such as banks or financial institutions.
This new paradigm has the potential to democratize access to financial services, reduce costs, and increase transparency in the financial system. However, as with any emerging technology, there are also risks associated with DeFi, including potential security vulnerabilities and regulatory challenges.