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DeFi, the acronym for Decentralized Finance, is increasingly gaining traction and wider adoption in the blockchain and cryptocurrency space.
Since the DeFi summer in 2020, it has seen incredible growth amongst cryptocurrency and blockchain enthusiasts which have helped drive its adoption through the roof.
The Total Value Locked (TVL) across DeFi protocols in the bloss all DeFi protocols according to https://defillama.com/ is $55.51 billion as at the time of writing this piece.
While the history of DeFi can be traced back to the invention of Bitcoin
Smart contracts are programmable contracts that allow two counterparties to set conditions of a transaction without the need for a third/centralized party.
By now, you’re probably wondering what all of this means…
Well, hang on to your seat because you’re about to find out.
Decentralized Finance or DeFi is the movement that allows users to access financial services via decentralized applications (dApps) without the need to rely on traditional/centralized financial institutions.
This movement is aimed at creating open-source, permissionless and transparent financial services which allows users to have absolute control of their money.
These range of financial services include:
So far, DeFi has allowed people to optimize their yield, join decentralized marketplaces, access banking services, and engage in quick borrowing and lending.
However, DeFi isn’t without its risks, and you should always research any project carefully before taking risks.
Some of these risks include:
What do I need to access DeFi projects?
To connect to DeFi DApps, you’ll need…
One thing to have top-of-mind: The space is nascent and still experimental so it’s important you understand that this space is riddled with risks, scammers and errors.
Be careful!
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