Glossary

Decentralized Finance, or DeFi, is a movement based on the idea that financial structures should be free from the control of any single entity, government, or third party.

What Does Decentralized Finance (DeFi) Mean?

Decentralized finance is a relatively new financial system that works on a decentralized blockchain framework. It uses 

 technology to ensure its users access to almost all financial products and services which are typically carried out through centralized or traditional financial set-ups. With DeFi, these are all carried out without the need for any centralized authority. 

The main goal of DeFi is to enable faster, streamlined transactions and enhanced accessibility to financial services. It is also the idea that powers the formation of decentralized autonomous organizations (DAOs).

Distribution and control of power is the main differentiator between decentralized finance and more traditional, centralized financial models. Centralized finance gives power to limited ruling parties, be it governments, banks, or other organizations. 

Decentralized finance distributes this control among the masses. It works with a dispersed and secured ledger, the same blockchain technology used by cryptocurrencies. 

You can read our guide about the differences between 

While it does offer considerable benefits over a centralized financial system, all is not rosy in the world of DeFi. It's good to remember that it is, after all, relatively new, and has several drawbacks.

The use cases for decentralized finance reimagine many of the limitations imposed by CeFi. Some of these include:

Decentralized Finance (DeFi)

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