DeFi or decentralized finance Explained
DeFi, or decentralized finance, is a new way to execute financial transactions through applications. It cuts out traditional financial institutions and intermediaries and is conducted over the blockchain . Think of it as removing brokerages, exchanges, banks and other intermediaries from the equation. "Purists claim DeFi must have no centralized control but run autonomously on a blockchain through the use of smart contracts – bits of code that perform actions once certain conditions have been met," says Chris Roper, a spokesperson for peer-to-peer lending site MyConstant. These contracts self-execute when specific outcomes come to fruition. For example, you could create a contract with someone else that pays you one bitcoin if the Charlotte Hornets beat the Los Angeles Lakers, as revealed by the ESPN website. If the Lakers win, you would pay out one bitcoin. You can imagine such contracts being tied to all sorts of obscure conditions. "In reality, however, DeFi has b
