What Is DeFi? Understanding Decentralized Finance in Simple Terms

DeFi, or Decentralized Finance, is an emerging financial system built on blockchain technology that operates without traditional intermediaries like banks or brokers. Instead, it uses self-executing smart contracts to enable services such as lending, borrowing, trading, and earning interest ,all accessible to anyone with an internet connection. Key features include transparency, user control, open access, and interoperability between apps. While DeFi offers exciting opportunities for innovation and financial inclusion, it also comes with risks like smart contract vulnerabilities and market volatility. In essence, DeFi aims to rebuild finance as an open, permissionless, and programmable ecosystem putting financial tools directly in the hands of users.