DeFi Made Easy

Sparkler via Abdelmoughit Lahbabi

DeFi is getting a ton of buzz in 2021. 

Yet, a concise explainer remains elusive. So, here is one for you.

DeFi is short for Decentralized Finance. It’s a crypto term representing financial networks built on the blockchain. No banks, brokers, lawyers, or insurance agents required.


DeFi is early in its evolution and so it’s still vague, but imagine getting a loan or insurance, wiring money or doing any transaction without the need of a financial institution.

In a recent post titled Decentralized Finance: What It Is, Why It Matters, Marvin Ammori from Uniswap Labs writes,

With DeFi, anyone in the world can lend, borrow, send, or trade blockchain-based assets using easily downloadable wallets without having to use a bank or broker… 

Ideally, capital should be as seamless as information in the internet age. In particular, settlement should be instantaneous, transaction costs should be minimal, and services should be accessible 24/7/365.

… In the not-too-distant future, people will sell tickets, Apple stock, pork belly futures, socks, and much more using DeFi protocols.

So there’s no middle man and no hidden fees.

Potential DeFi applications may include lending platforms, exchanges, digital currencies, and the like.

Like we said, it’s so early but the promise of DeFi is that financial transactions will become faster, cheaper, and more fair.

This will get easier to grasp if and when DeFi applications gain mass adoption. 

Here are some well-curated links for those looking to go deeper— 

Decentralized Finance: What It Is, Why It Matters via Future

Tom Schmidt Explains What You Need to Know about DeFi via Odd Lots Podcast

Decentralized Finance (DeFi) Explained via Real Vision (4:44)

A Brief History of Decentralized Finance (DeFi) via MakerDAO

SEC Commissioner Hester Peirce Argues In Favor Of DeFi’s Promise Of Disintermediation via The Block Crypto 

What Are Flash Loans? The DeFi Lending Phenomenon Explained via Decrypt

FinTech 3.0 Re-Architecting Financial Market Infrastructure & DeFi via John Street Capital

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