What is DeFi?
Decentralised Finance (DeFi) refers to a global, open financial system built on programmable blockchains. Unlike traditional finance, DeFi protocols operate through self-executing smart contracts — code that holds and moves funds automatically according to pre-defined rules.
How DeFi differs from traditional finance
In traditional finance, a bank or broker sits between every transaction. They hold your money, set the rules, take a cut, and can freeze your account. In DeFi, the smart contract is the intermediary. It is public, auditable, and — in well-designed protocols — immutable. No CEO can change the rules after you deposit.
What you can do with DeFi
- Earn yield on stablecoins without a bank account
- Swap tokens instantly on decentralised exchanges (DEXs)
- Borrow against your crypto without a credit check
- Provide liquidity to trading pools and earn a share of fees
- Participate in governance of protocols you use
Risks to understand
Smart contract bugs, oracle manipulation, and rug pulls are real risks in DeFi. The best protocols mitigate these through independent audits, renounced ownership, and locked liquidity.
DeFi by the numbers (2026)
Total Value Locked (TVL) across all DeFi protocols exceeds $100 billion. BNB Smart Chain hosts hundreds of active DeFi protocols, making it one of the most accessible chains for new participants due to low transaction fees.