Decentralized Finance: Understand What Is DeFi


     DeFi is one of the most popular topics in the Web3 universe, as Decentralized Finance is not only the future of Money, but also the future of Privacy.

Decentralized Finance: Understand What Is DeFi
Decentralized Finance: Understand What Is DeFi

What Is DeFi?

     DeFi is an acronym in English for Decentralized Finance, which refers to the set of financial services and products that work on a blockchain network, a type of shared and immutable database.

     These services and products are not controlled by intermediaries, such as banks or other financial institutions, but by algorithms and smart contracts, which are computer programs that perform operations automatically. The goal of DeFi is to create a decentralized, independent, cheap, less bureaucratic, global financial system accessible to everyone.

     DeFi emerged shortly after the launch of the Ethereum network in 2015, which was the first platform to allow the development of decentralized applications (DApps) on its blockchain. One of the first DeFi projects was MakerDAO, a decentralized lending platform that uses a stable cryptocurrency called DAI, which is pegged to the US dollar.

     Since then, many other DeFi projects have been created, offering services such as cryptocurrency exchange, loans, insurance, fixed income, lotteries, among others. Some of the main representatives of this market are Uniswap, Aave, Compound, Yearn.Finance, Synthetix and Curve.


Web3 is a very common concept among crypto enthusiasts, but do you really know What Web3 is? Many believe it to be the same as the Metaverse, but it is not. Discover its Meaning.

How is the DeFi Market?

     DeFi is a market in constant growth and innovation, which attracts more and more investors and users. According to the DeFi Pulse website, the total value locked (TVL) in DeFi projects exceeded US$100 billion in April 2023, an increase of more than 10 times compared to the same period in the previous year.

     DeFi also represents an opportunity for people who do not have access to traditional financial services, or who are looking for more efficient and transparent alternatives.

     However, Decentralized Finance also involves risks such as smart contract failures, hacker attacks, cryptocurrency volatility, and uncertain regulation. Therefore, it is important to be well informed before entering this market.

What Are the Advantages of DeFi?

  • Practicality: there are no intermediaries between transactions, which are decentralized;
  • Accessibility: DeFi lending applications tend to be less bureaucratic and charge lower fees than those charged by banks or other institutions;
  • Yield: DeFi can offer higher interest rates than other traditional applications;
  • Security: operations in DeFi protocols are described and executed by algorithms and smart contracts, which are self-executing computer programs that guarantee the rights of each party;
  • Transparency: DeFi transactions are recorded on a blockchain, which is a type of shared and immutable database, which allows the verification and auditing of all operations;
  • Inclusion: DeFi can offer access to financial services for people who don't have a bank account or who live in financially constrained regions.
These are some of the advantages of DeFi, but there are also risks and challenges, such as smart contract failures, hacker attacks, cryptocurrency volatility, and uncertain regulation1. Therefore, it is important to be well informed before entering this market.

Lucas Lippe

The idea of freedom is fascinating and Bitcoin gives us that in many ways. Explaining ideas of a decentralized web on the Bitcoin Lovers website.

Also check:

Be the first to read what's new!


Cryptocurrency investments are risky. The Bitcoin Lovers website is not responsible for the quality of the products or services presented on the pages and cannot be held responsible, directly or indirectly, for any damage or injury caused after the use of a good or service highlighted in this or any other article. Cryptocurrency related investments are risky in nature, readers should do their own research before taking any action and invest only within the limits of their financial capabilities. This page or any other article does not constitute investment advice.

AMF Recommendations: There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of that savings. Do not invest if you are not willing to lose all or part of your capital.