DeFi
DeFi Strategies • Yield Models • Token Income
decentralized finance
DeFi, short for decentralized finance, refers to a movement that uses blockchain technology and smart contracts to recreate traditional financial services—like lending, borrowing, and trading—without relying on centralized institutions such as banks or brokerages. It allows users to maintain full custody of their assets while interacting with open, permissionless financial protocols.
Use Case: A user deposits stablecoins into a DeFi lending protocol to earn passive yield, maintaining full control of their funds while earning interest—no bank account or approval required.
Key Concepts:
- Smart Contracts — Self-executing code that automates financial transactions
- Self-Custody — Users maintain control of their private keys and assets
- Permissionless — Anyone can access DeFi protocols without approval or intermediaries
- Yield Farming — Earning rewards by providing liquidity to DeFi protocols
Summary: DeFi reimagines finance as an open, transparent, and user-controlled system. By removing middlemen and enabling direct peer-to-peer transactions, it empowers individuals to access lending, trading, and yield opportunities globally—without traditional gatekeepers.