What is DeFi?

Decentralized finance (DeFi) offers financial instruments without relying on intermediaries such as brokerages, exchanges, or banks. Instead, it uses smart contracts on a blockchain. DeFi platforms allow people to lend or borrow funds from others, speculate on price movements on assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts (Yield-Farming/Staking). DeFi uses a layered architecture and highly composable building blocks. Some applications promote high-interest rates but are subject to high risk.