Introduction to DeFi: Beyond Bitcoin

What is Decentralized Finance (DeFi)?

Decentralized Finance, or DeFi, is a revolutionary movement that aims to build a global, open-source, and permissionless financial system on top of public blockchains, primarily Ethereum. Unlike traditional finance, DeFi eliminates the need for intermediaries like banks, allowing individuals to borrow, lend, trade, and earn interest on their assets in a peer-to-peer fashion.

Core Components of DeFi

The DeFi ecosystem is built on several key components:

• Stablecoins: Cryptocurrencies pegged to stable assets like the US dollar, providing stability in a volatile market.
• Decentralized Exchanges (DEXs): Platforms that allow users to swap digital assets directly with one another without a central authority.
• Lending & Borrowing Protocols: Services that enable users to lend their crypto to earn interest or borrow assets against collateral.
• Yield Farming: A strategy where users move their funds between different lending protocols to maximize their interest earnings.