What is DeFi (Decentralized Finance)?

DeFi (decentralized Finance) means decentralized finance. On the blockchain network, financial systems that operate without a centralized structure are defined as DeFi. In this article, you can find the answer to the What is DeFi question.

What is DeFi (Decentralized Finance)?

DeFi is a financial system that can be transacted without the need for legal boundaries and without any intermediary institution. DeFi platforms provide users with; provides services in many areas such as financial investment services, insurance services, banking transactions.

Why Was DeFi Created?

With the creation of the Genesis Block in 2009, the concept of decentralized finance was discussed for the first time. DeFi’s emerged to make financial transactions without being connected to a centralized system. DeFi’s are not dependent on a centralized element such as government, company, individual or organization. Each user is responsible for his own actions. Central authorities cannot establish any control mechanism over users.

What are the Advantages of DeFi’s?

DeFi’s aim is to eliminate errors and problems in the traditional financial system. Users can make international money transfers quickly, cost-effectively, at any time they prefer on DeFi platforms.

What Are the Disadvantages of DeFi’s?

In DeFi systems, users may have problems in undoing and compensating their transactions when they make a mistake. Users in regions without technological infrastructure may encounter obstacles in accessing DeFi systems. In the cryptocurrency market, there may be fraudulent DeFi projects. Users may be victims of these fraudulent projects.

In decentralized financial systems, users may not have a chance to leave a legacy for future generations. In decentralized financial systems, users may not have personal legal rights.