What is DeFi (Decentralized Finance)?
DeFi describes financial applications — lending, trading, derivatives, stablecoins — implemented as smart contracts on a public blockchain. Users interact directly with the protocol via a wallet, without traditional intermediaries.
Why DeFi (Decentralized Finance) matters
Understanding DeFi (Decentralized Finance) is part of building a solid mental model of how Bitcoin, blockchain and Web3 systems actually work. Concepts in the Ethereum category sit at the foundation of the broader stack — get them right and the rest is far easier.
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Related terms
- Smart Contract — Code on a blockchain that automatically enforces its rules.
- Ethereum — A programmable blockchain that supports smart contracts.
More ethereum terms
- EVM (Ethereum Virtual Machine) — The execution environment for Ethereum smart contracts.
- Gas — The unit measuring computational cost on Ethereum.
- NFT (Non-Fungible Token) — A unique, non-interchangeable token on a blockchain.
- Solidity — The most popular programming language for Ethereum smart contracts.
- Web3 — An umbrella term for blockchain-based, user-owned internet applications.
- DAO (Decentralized Autonomous Organization) — An on-chain organization governed by token holders.
- dApp (Decentralized Application) — An app whose backend lives on a blockchain.
- DEX (Decentralized Exchange) — A smart-contract-based trading protocol.
Keep exploring
Continue with the full blockchain glossary — 136 terms in total — or read the developer blog and FAQ for deeper context.