DeFi
finance without banks
Decentralized Finance replaces banks, brokers and insurers with smart contracts. Lend, borrow, trade and earn — with full control of your money.
What is DeFi?
DeFi (Decentralized Finance) is a set of financial services built on blockchain smart contracts, mostly Ethereum. Anyone can borrow, lend, trade or save without a bank or broker.
Instead of trusting an institution, you trust audited code. Your funds remain in your own wallet; contracts execute automatically and transparently, 24/7.
No account, no KYC, no minimum. Anyone with a wallet can access every service.
All code and reserves are public on-chain. Anyone can audit and verify them.
You keep control of your funds. The protocol never holds your private keys.
The building blocks of DeFi
DeFi apps combine a few core building blocks. Here is how the main ones work.
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1
Lending protocols
Deposit assets into a pool, earn interest. Borrow by putting up collateral — no credit check, no bank.
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2
DEXes
Decentralized exchanges (Uniswap, Curve) swap tokens automatically using liquidity pools instead of order books.
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3
Liquidity pools
Users provide pairs of tokens to a pool and earn trading fees. That liquidity powers instant swaps.
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4
Stablecoins
Assets pegged to a currency (USDC, DAI, USDT). They are DeFi’s stable building block.
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5
Yield farming
Moving assets between protocols to maximize rewards. Higher returns, higher risk.
DeFi risk vs TradFi risk
No single institution, but new kinds of risk. Compare where the risk actually sits.
PoW
PoS
DPoS
Fear & Greed index
The Fear & Greed index (0 = extreme fear, 100 = extreme greed) measures crypto investor sentiment. Current value:
Live market
Top cryptocurrencies and their 24h change. Data refreshed every 3 minutes (CoinGecko).
| # | Coin | Price | 24h |
|---|---|---|---|
| 1 |
Bitcoin
BTC
|
$64 327 | -1,20 % |
| 2 |
Ethereum
ETH
|
$1 892 | -1,70 % |
| 3 |
Tether
USDT
|
$1,00 | +0,00 % |
| 4 |
BNB
BNB
|
$607,47 | +0,50 % |
| 5 |
USDC
USDC
|
$1,00 | +0,00 % |
| 6 |
XRP
XRP
|
$1,01 | -2,50 % |
| 7 |
Solana
SOL
|
$76,16 | -0,90 % |
| 8 |
TRON
TRX
|
$0,34 | +1,70 % |
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DeFi building blocks
The four pillars of the DeFi ecosystem.
Lending
- Aave, Compound
- Deposit to earn interest
- Over-collateralized loans
- Flash loans (no collateral)
- Interest set by supply & demand
DEXes
- Uniswap, Curve, Balancer
- Peer-to-pool swaps
- No order books
- Liquidity providers earn fees
- AMM models
Derivatives
- dYdX, Synthetix
- Perpetuals & options
- Leverage trading
- Synthetic assets
- High-risk products
What can you do in DeFi?
The main activities, from the simplest to the most advanced.
Lend and earn
Deposit stablecoins into a lending protocol and earn interest without a bank account.
Swap tokens
Exchange one token for another instantly on a DEX, without an order book or a broker.
Borrow
Borrow stablecoins against your crypto collateral to stay invested while accessing liquidity.
Stake
Lock tokens to secure a network or protocol and earn rewards in return.
DAO treasury
Projects manage treasuries and budgets transparently through on-chain governance.
Insurance
Decentralized insurance pools cover smart-contract failures and exchange hacks.
Advantages & Risks
Advantages
- ✔Open to everyone, everywhere — no bank account or approval needed.
- ✔Full transparency: all code and reserves are auditable on-chain.
- ✔Non-custodial: you stay in control of your funds.
- ✔Composable: protocols plug into each other like Lego.
- ✔Available 24/7 with instant, global settlement.
Risks
- ✕Smart-contract bugs and exploits have caused real losses.
- ✕Price volatility can trigger liquidations of collateral.
- ✕Impermanent loss for liquidity providers.
- ✕Regulatory uncertainty in many jurisdictions.
- ✕High learning curve and high gas fees on Ethereum mainnet.
Quick glossary
The DeFi terms you need to know.
DeFi FAQ
What is DeFi in simple terms?
Do I need a bank to use DeFi?
How do I make money in DeFi?
Is DeFi safe?
What is the difference between DeFi and CeFi?
Which blockchain is best for DeFi?
What are the risks of yield farming?
Can I lose all my money in DeFi?
This page is for education only and is not financial advice. DeFi involves significant risk.
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