What is DeFi?

DeFi stands for Decentralized Finance. DeFi transfers traditional financial products into the decentralized world of blockchain technology and cryptocurrencies.

DeFi follows the peer-to-peer idea of the first cryptocurrency, Bitcoin: on decentralized financial markets, market participants can trade directly with each other or lend money to each other without the intermediation of a central institution such as a bank.

The DeFi transactions are automated through so-called “smart contracts”. These “intelligent contracts” are, in simplified terms, computer programs that execute themselves as soon as certain conditions are met.