DeFi (Decentralized Finance)

DeFi (Decentralized Finance) is a system of financial services—like lending, borrowing, and trading—built on blockchain networks instead of traditional banks. You'll encounter it in crypto investing and discussions about the future of money. It matters because it removes middlemen, potentially lowering fees and letting anyone participate without a bank account, though it also comes with higher risks since there's no safety net like FDIC insurance. For example, instead of depositing money in a bank for interest, someone might lend crypto through a DeFi platform and earn returns directly from borrowers. The tradeoff: you're responsible for your own security, and smart contracts (automated programs) can have bugs.