What is Decentralized Finance (DeFi)?

DeFi: the new financial frontier.

  • DeFi is open. There are no gatekeepers, middlemen, nor a need to identify yourself.
  • DeFi is permissionless. You don't have to qualify.
  • DeFi is trustless. Our contracts execute without any manual intervention. Nobody can touch your money.


Let's start with the obvious. "Decentralized finance" means: finance that isn't centralized. This means the money involved isn't controlled by one company. This may seem strange. When we deposit money into our bank's savings account, the bank maintains the money. When we invest some money into a mutual fund or stocks, the brokerage we use controls these funds. We're used to this idea.


We're also used to the inconvenience and risk involved. What if the bank or brokerage has their system hacked? Might your identity (or even money) be at risk? And what if you just want to withdraw some money on a given day, but that day is a Sunday? Or a government holiday? Or it just isn't the right time of the day? Or what if you're out of town, and your bank branch isn't nearby?


It's your money, but you can only access it when the bank says you canand sometimes only in the amounts they allow. And then there's the sluggishness, red tape, and fees for taking out loans. 


Decentralized finance "DeFi" has come along to offer a solution to these problems. With DeFi, no third party has control of your money. You do. It's stored on a decentralized, global computer network. This means only you can access the money—whenever and wherever you desire. Second, you've greatly reduced the risk, because the money is not held by a single entity, which hackers have a much easier time breaking into. 


At DeFiner, we are building the infrastructure for using decentralized finance.


To learn more about decentralized finance, here's an essay from the website Defi Pulse.


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