DeFi
DeFi (noun) means Financial services such as lending, borrowing and currency exchange, run by software on a blockchain rather than by a bank or broker, so that users deal directly with the programs and with each other. Example: “He swapped one token for another using DeFi rather than an exchange.”
How to use DeFi
Learner’s notesIn plain EnglishBanking-style services run by computer programs instead of by a bank.
Usually written with a capital D and a capital F. Common in industry writing and financial journalism; still unfamiliar to general readers.
The opposite term you will meet most often is CeFi, centralised finance, meaning a crypto company that holds your funds for you.
Trace the full origin ↓Fill the gap
Can you complete this real example?
He swapped one token for another using _____ rather than an exchange.
Etymology
A blend of decentralised finance, shortening de- from decentralised and fi from finance.
Synonyms
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Related words
Frequently asked questions
What is the difference between DeFi and a normal bank?
A bank holds your money, decides who may borrow and can reverse a payment. In DeFi, the rules are written into programs on a blockchain that anyone can inspect and use, and transactions are generally not reversible. There is usually no institution obliged to compensate users if something goes wrong.
What is the difference between DeFi and CeFi?
CeFi, centralised finance, means crypto companies such as exchanges that take custody of customer funds and run their own internal records. DeFi means the same kinds of service provided by programs running on a public blockchain, with users keeping control of their own wallets.
Is DeFi regulated?
Treatment varies widely by country, and rules are still developing in many places. Some jurisdictions apply existing financial law to parts of the sector, while other activities fall outside the frameworks that cover banks and brokers.
What is the meaning of DeFi?
"DeFi" (noun) means financial services such as lending, borrowing and currency exchange, run by software on a blockchain rather than by a bank or broker, so that users deal directly with the programs and with each other.