Simply put, DeFi is an alternative system of finance built with cryptography, usually on blockchains, to operate without middlemen.
DeFi replaces traditional financial intermediaries with transparent, programmable smart contracts that execute automatically based on predefined rules.
Instead of trusting a central authority to deliver on promises while running Ponzi schemes that you cannot ascertain or verify independently, you trust in the fundamental principles of mathematics and computer science: the fact that numbers don’t lie and computers don’t have hidden agendas when executing transparent code. Even cooler, DeFi is open globally in an open-source finance setting where anyone with an internet connection and a crypto wallet can participate. no opening hours, no long forms to fill, and no waiting for approvals. You are in control of your assets 24/7.
Unlike traditional banks, DeFi operates 24/7 globally with no KYC requirements or geographical restrictions.
The goal is simple:
  • Return financial power to individuals.
  • Make it wholesome, get rid of unnecessary intermediaries.
  • Opening up opportunities that were traditionally reserved for large institutions or high-net-worth individuals.
DeFi democratizes finance by removing barriers that traditionally excluded retail investors from institutional grade opportunities.
It’s finance without borders, bureaucracy, or gatekeepers.

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Why DeFi?

DeFi for incentives and essence. Maybe nothing else other than the easy access to opportunities and yield that you’d hardly get as a CeFi user. My first investment was a fixed deposit at a local bank back in 2018, and the APY was a meagre 6% with an illusion of certainty that I’d get my money back. Eventually, I learned about apps offering 18% and while that was cool, the processes were a lot more demanding. If that were DeFi, not only would I not need to visit a local bank with my ID and spend hours there, I’d most probably get higher than 6% APY on my deposit, and I’d have access to underlying protocols powering my investment directly without needing a middleman.
While DeFi offers higher yields, remember that higher returns come with higher risks. Always do your research and never invest more than you can afford to lose.
DeFi is open, totally accessible, and verifiable without intermediaries. That’s why the big players have been trooping in looking for yield. You need to understand what powers DeFi and how you can access these opportunities, and that’s what’s next.