decentralized finance

Syllable breakdown

Dictionary meaning

a financial ecosystem built on public blockchain networks, primarily Ethereum, that replicates and extends traditional financial services — including lending, borrowing, trading, and yield generation — through self-executing smart contracts rather than banks, brokers, or centralised intermediaries; DeFi protocols are open-source, permissionless, and composable, meaning anyone with an internet connection can access them and that protocols can be combined like building blocks; while DeFi has enabled significant financial innovation and access, it has also been associated with high volatility, smart contract exploits, rug-pull scams, and regulatory ambiguity