DeFi – Decentralized Finance

Decentralized Finance refers to the construction of open source financial infrastructure on top of permissionless layer 1 protocols like Ethereum. To make censorship resistant financial services widely available to anyone with an Internet connection.

Because the foundation of DeFi applications are usually open source smart contracts. Anyone can show up and start using these apps to generate financial returns without the permission of a third party.

Take the Automated Market Maker Uniswap for example. Unlike a typical centralized exchange, anyone can show up with capital and earn a return as a market maker on Uniswap. Without needed to be licensed like market makers operating on traditional exchanges. 

Any cryptoasset can list itself for exchange on Uniswap. Transactions to buy and sell listed assets can be initiated by any user. Without the need to identify themself through the standard KYC/AML requirements commonplace when transacting in the TradFi world. 

Further DeFi Reading

What is DeFi? Everything you need to know about the future of decentralized finance