What is DeFi? Popular DeFi protocols

Ever since Bitcoin’s initiation in 2009, the concept of decentralized finance or DeFi has slowly come into being. As of 2022, the global DeFi crypto market cap is close to $48 billion. If you are new to the world of crypto, you may not be aware of the concept of decentralized finance. In this article, we take you through the notion of DeFi quickly and also tell you about some of the most popular DeFi protocols you can invest in today.

First Things First: What is DeFi?

DeFi is a global, open financial system designed to keep up with the digital age. It is a new financial technology that is based on secure distributed ledgers, similar to the ones used by cryptocurrencies. DeFi mainly consists of financial services and products provided on public blockchains, primarily Ethereum. It is a viable alternative to an opaque, tightly controlled system held together by decades-old infrastructure and processes.

As of right now, the DeFi applications we have available, like decentralized lending/borrowing and insurance, are essentially virtual representations of the same fiat applications, with the added benefit of being decentralized and handing over more control to the users of their own funds.