What is DEFI? Decentralized Finance Explained

DeFiInspired by blockchain technology, DeFi is referred to as financial applications built on blockchain technologies, typically using smart contracts.Learn more or decentralized finance is a movement that aims at making a new financial system that is open to everyone and doesn’t require trusting intermediaries like banks. To achieve that defi relies heavily on cryptography, blockchainA blockchain is a digital ledger of transactions that works from a decentralized network.Learn more and smart contracts.

Smart contractsSmart contracts are simply programs stored on a blockchain that run when predetermined conditions are met.Learn more are the main building blocks of defi. If you don’t know what smart contracts are or you want to refresh your knowledge you can pause this video and watch my introduction to smart contracts video first.

Smart Contracts Explained ► youtu.be/pWGLtjG-F5c

It’s worth noticing that currently most if not pretty much all of the defi projects are built on EthereumEthereum (ETH)2$ 1,476.860.15%1h-0.14%24h1.09%7ddetails. The main reason for this is the Ethereum’s fairly robust programming language called Solidity that allows for writing advanced smart contracts that can contain all the necessary logic for the defi applications, besides that Ethereum has the most developed ecosystem across all the smart contract platforms with thousands of developers building new applications every day and the most value locked in smart contracts which create an additional network effect. In fact, all the defi protocols mentioned in this video are built on Ethereum.

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