Web Trader MT5
DeFi is short for Decentralized Finance, and it refers to financial services and products built on decentralized blockchain networks, without relying on traditional financial institutions such as banks, brokers, and exchanges.
It’s a concept of replicating basic financial activities like loans, borrowing, trading, and interest-earning using smart contracts that can be automatically executed on a public blockchain.
No loan officer is signing this new loan application, no broker is signing this new trade, and no bank is holding your deposit. The code does it all!
DeFi experienced tremendous popularity between 2020 and 2022, as billions were invested in lending protocols, decentralized exchanges, and yield farming strategies, among others. It’s also been targeted by hackers, with smart contract exploits resulting in billions of dollars in losses across the industry.
DeFi regulatory status remains highly unsettled, and consumer protection, money laundering, and systemic risk have become concerns for authorities worldwide.
Example: A user wants to gain interest on their crypto assets without moving them to a centralized exchange. They deposited tokens into a DeFi lending protocol that will automatically lend those funds to the borrower, and the interest earned on that loan will be sent to the borrower without any company involved and no application for an account required, and all controlled by a smart contract.
