DeFi (decentralised finance), as opposed to centralised finance, refers to anything that offers loans, borrowings, bets, or some kind of reward to the user for bringing capital into the system. Unlike traditional banks, it uses intelligent contracts to eliminate all intermediaries that would otherwise be involved. It also eliminates all of the high costs associated with the old system, which are passed on to the end user.
Decentralized finance continues to rely heavily on the Ethereum block chain (which has had difficulties in adapting to mass users). However, once Ethereum adopts the Proof of Stake consensus mechanism, the number of users it can support will be potentially limitless. The next wave of cryptocurrency adoption will begin. Furthermore, serious competitors such as Compound and Maker DAO will propel DeFi to an increasing number of users.

Decentralized finance (DeFi) is a financial system that operates without traditional intermediaries like banks, using blockchain technology to facilitate transactions. It leverages smart contracts, which are self-executing contracts with the terms directly written into code, to enable secure and transparent financial services. DeFi encompasses a wide range of applications including lending, borrowing, trading, and earning interest on digital assets. By eliminating intermediaries, DeFi aims to democratize finance, making it accessible to anyone with an internet connection. This system promotes transparency and reduces costs associated with traditional financial services. However, DeFi also faces challenges such as regulatory uncertainties, security vulnerabilities, and the complexity of its technology, which requires users to have a good understanding of how it operates.