DeFi stands for decentralized finance and describes a cluster of companies and applications offering financial services using the blockchain technology.
DeFi is basically financial software developed on the Blockchain. It is the exact opposite of the traditionally centralized finance environment that centralizes financial services via banks or other financial institutions. DeFi aims to take away the weakness of centralized finance as being single points of failure, vulnerable and political influence.
DeFI uses smart contracts with rules embedded in computer code, enforced automatically and with all the data about transactions stored in a distributed ledger. In this set up, no one has complete control over transactions. Users can get access to these services through the, so called, decentralized applications (DApps), the majority of which are currently built on Ethereum. Examples of services offered by DeFi companies are: lending/borrowing, stablecoin issuance, trading, peer-to-peer payments and insurance.
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