DeFi (Decentralized Finance)

DeFi (Decentralized Finance) refers to financial services—like lending, borrowing, and trading—built on blockchain networks without traditional intermediaries like banks. Instead of a company controlling your money, smart contracts (self-executing programs) handle transactions automatically. You'll encounter DeFi when exploring cryptocurrency investments, as it's where much of the crypto ecosystem's activity happens. DeFi matters because it can offer faster transactions and lower fees than traditional finance, though it's also riskier and less regulated. For example, someone might deposit cryptocurrency into a DeFi platform to earn interest, similar to a savings account, but without a bank in the middle.