What is DeFi?
Decentralized finance describes financial applications implemented through blockchain-based protocols and smart contracts.
Common categories
- Decentralized exchanges.
- Lending and borrowing.
- Stablecoins.
- Liquidity pools.
- Derivatives.
- Yield and staking-related systems.
Risks
DeFi can involve smart-contract risk, oracle risk, liquidity risk, governance risk, stablecoin risk, liquidation risk, and user-interface attacks.
High advertised yields can reflect high risk, temporary incentives, or unsustainable token emissions.
