DeFi (Decentralized Finance) is revolutionizing how we think about financial services. Here's everything you need to know.
What is DeFi?
DeFi refers to financial services built on blockchain technology that operate without traditional intermediaries like banks. Anyone with an internet connection can access lending, borrowing, trading, and more.
Key DeFi Categories
Decentralized Exchanges (DEXs)
Trade crypto without intermediaries. Examples: Uniswap, SushiSwap, Curve
Lending & Borrowing
Earn interest or borrow against crypto collateral. Examples: Aave, Compound, MakerDAO
Liquid Staking
Stake assets while keeping liquidity. Examples: Lido, Rocket Pool
Yield Aggregators
Automatically optimize yield strategies. Examples: Yearn Finance, Convex
DeFi Risks
- Smart contract bugs
- Impermanent loss in liquidity pools
- Protocol exploits and hacks
- Regulatory uncertainty
Getting Started with DeFi
- Set up a wallet like MetaMask
- Acquire ETH for gas fees
- Start with reputable protocols
- Never invest more than you can lose