Beginner
DeFi
Also: decentralized finance, decentralised finance
Financial services such as trading, lending and borrowing that run on smart contracts instead of banks.
DeFi apps are smart contractsSmart contract A program stored on a blockchain that runs automatically when its conditions are met. you connect to with a walletWallet Software or a device that stores the keys you need to access and move your crypto., with no account application and no opening hours. The trade-off is that you carry the risks a bank would normally manage: code bugs, oracleOracle A service that feeds outside information, like asset prices, into smart contracts. errors and your own mistakes.
Related terms
- Decentralized exchangeA smart-contract-based marketplace where people trade tokens directly from their own wallets.
- Liquidity poolA pot of two or more tokens locked in a smart contract that traders swap against.
- Smart contractA program stored on a blockchain that runs automatically when its conditions are met.