What is DeFi?

DeFi (Decentralized Finance) is a new financial system that works on the basis of blockchain technology. It allows users to access financial services without having to contact banks or other financial institutions.

How does DeFi work?

1. DeFi uses smart contracts-programs that automatically fulfill the terms of a transaction when certain conditions are met. This makes the process more transparent and secure.

2. Users can take out loans, lend money, exchange currency, and even earn interest on their assets. All this happens without the participation of intermediaries.

3. DeFi works on decentralized platforms such as Ethereum, Binance Smart Chain and others. These platforms allow developers to create their own applications for DeFi.

4. To work with DeFi, you must have a cryptocurrency. You can buy it on an exchange or get it in exchange for another cryptocurrency.

5. To get started with DeFi, you need to install a cryptocurrency wallet and choose the platform on which you will work. Then you can use various applications to perform financial transactions.

DeFi Benefits:

• Transparency and security: all transactions are recorded in the blockchain, which makes them open for verification.

• No intermediaries: DeFi allows users to interact directly with each other.

• Low fees: In DeFi, there is no need to pay high fees to banks and other financial institutions.

• Availability: DeFi is available to anyone who has a cryptocurrency.

However, DeFi also has some risks, such as the possibility of losing funds due to errors in smart contracts or hacker attacks. Therefore, before you start working with DeFi, it is recommended to learn the basics of this system and be careful when choosing applications.

In general, DeFi represents a promising area that can change traditional ideas about finance. However, like any new technology, it requires a careful approach and understanding of the risks involved.