DeFi stands for decentralized finance and is a financial system based on blockchain that does not rely on a central control point (such as banks, brokerage firms, lenders, and other government-regulated entities), making financial transactions more accessible.

DeFi is similar to our current financial system but is peer-to-peer and relies on decentralized currencies called cryptocurrencies and decentralized services called DApps to facilitate transactions.

If the government doesn’t control DeFi, then who creates the financial instruments involved in crypto?

There are no limitations, and that’s why anyone can! If you have experience with decentralized technology, you can be at the forefront of shaping the future of DeFi.

What is a DeFi Coin (Cryptocurrency)?

DeFi Coin or DeFi token is a digital asset that can be bought, sold, and traded using decentralized solutions called DApps. DeFi Coins are created by people for people, without government intervention.

DeFi coins are issued on a blockchain in an open-source environment, on modular frameworks that are censorship-resistant. These tokens can be pegged to the US dollar, fluctuate based on supply and demand like stocks, or automatically adjust according to price fluctuations, also known as “rebasing.”

You can use cryptocurrency to pay for goods or send to friends. Transactions occur through the Bitcoin network, a decentralized network of independent nodes that verify each transaction.

What are DApps?

DApps, or Decentralized Applications, are financial instruments that allow you to buy, sell, and trade digital assets, similar to the solutions we use today, such as PayPal or Robinhood, but solely on a decentralized network. Since DApps operate on the blockchain, no one has control over the network.

Not all DApps enable the buying, selling, and trading of cryptocurrencies – some of them facilitate lending and borrowing of various crypto assets. If you explore some of the current top crypto tokens and DApps, you will discover many different types of DApps for various use cases.

Why DeFi in Crypto?

When cryptocurrency was created, its transaction history is stored on a public ledger that records ownership, making the records visible to everyone. However, the transaction is tied only to the user’s wallet, not their personal identity, giving people more discretion in how they dispose of and store their money.

With cryptocurrency, you don’t have to rely on banks or brokerage firms, making it easier to manage your own money. Blockchain allows you to retain full control over your assets using digital wallets. These digital wallets securely hold your funds, and access can only be granted through a private key that only you possess.

On the blockchain, you can send peer-to-peer transactions to anyone within the network from anywhere in the world, bypassing the approval of banks and other financial service intermediaries.

Cryptocurrency gives you greater control over your money and, in the minds of many, promises protection against inflation. We believe that the power of blockchain and cryptocurrency has just scratched the surface and that there is much more potential yet to be explored.