DEFI What is decentralized finance and how does it work?

November 9, 2020
DEFI are a new financial ecosystem, decentralized, global, transparent, resistant to censorship, without intermediaries and easily accessible.

DEFI What is decentralized finance and how does it work?

The DEFI or Decentralized Finance , are an alternative to traditional finance. Traditional financial services are all products related to means of payment or money management offered by a bank, a financial institution, insurance companies or investment companies, among others.

These traditional finances carry with them a series of obstacles, limitations and regulations that make them little accessible for some and not very attractive for others. Such as high commissions or control by banks and regulators.

Thanks to Blockchain and criptomonedas , the DEFI have come to upgrade, improve and globalize finance such obsolete, placing them at the reach of everyone no matter where you are, if you have access to the Internet anyone can use them .

What do DEFI offer? 

Global access to financial services

DeFi applications provide global access to financial services, although local restrictions may apply. To access DeFi platforms such as Maker or Compound Finance, users only require an internet connection and a smartphone, regardless of their location or country.

Complete control over assets 

DeFi offers users complete control over their assets as anyone can safely store, trade, and invest their assets on the blockchain, and no middleman handles these assets except smart contracts. Therefore, users have complete control over their assets.

Privacy, security and transparency 

With DeFi, users have custody of their wealth and can securely transact without validation from a central party. As all activities are recorded on the blockchain, all transactions are publicly available. Therefore, this offers better transparency than a centralized system, where records can be easily modified.


DeFi has the potential to change the current financial landscape in a positive way. But it is still a small market and has a long way to go. With new projects and protocols entering the market, the world can look forward to a true decentralized financial system for years to come.

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