What is DeFi?
Decentralized Finance is a way to use financial services that allows direct interaction between users without the intermediation of financial institutions such as banks. Thanks to the use of blockchain technology, DeFi enables users to make transactions, investments, loans and use other financial services in a safe, transparent and direct way.
How does DeFi work?
DeFi uses blockchain technology, which allows information to be stored in a decentralized and secure manner. In the case of DeFi, information about transactions, account balances and other financial operations is stored in the blockchain, and the transaction itself is handled using the so-called smart contracts – programs that perform certain activities automatically, without the need for third parties.
Thanks to this, DeFi allows users to use financial services directly, without having to involve financial institutions, which often charge high fees for their services. In addition, DeFi enables access to a number of financial services that are often unavailable in the traditional financial sector, such as automatic investing, decentralized exchanges or cryptocurrency-based loans.
Benefits of using DeFi
One of the biggest benefits of using DeFi is its immediacy and security. Thanks to the use of blockchain technology, users have full control over their funds and information about their financial operations. In addition, DeFi allows you to use financial services without the need to use intermediaries, which significantly reduces transaction costs.
Another benefit of DeFi is the availability of a range of financial services that are unavailable in the traditional financial sector.