What Is DeFi? A Beginner Guide
Understand decentralized finance, smart contracts, lending, swaps and the risks involved.
Decentralized finance, or DeFi, refers broadly to financial applications built using blockchain networks and smart contracts. These applications can provide functions such as swaps, lending or liquidity management without relying on a traditional centralized operator for every step.
Smart contracts
Smart contracts are programs deployed on compatible blockchain networks. Users interact with them through transactions, and bugs or design flaws can create significant risks.
Risks
DeFi can involve smart-contract, liquidity, market, oracle and operational risks. Never assume that decentralization makes an application risk-free.
Educational note: Digital assets involve risk. This article is general information, not financial, legal or tax advice.