Decentralized Finance, or DeFi, is an umbrella term describing open financial products and services that aim to provide an alternative to those offered by centralized institutions like banks, credit unions, or insurance funds.
In practice, DeFi enables anyone with an internet connection to access financial services including borrowing, lending, and trading, without the restrictions they would experience using a trusted (centralized) institution.
DeFi not only provides an alternative to traditional finance, but it increasingly seeks to rethink the way people interact with money, offering lower-cost, faster, and more flexible products and services.
These services are typically accessible via applications built on top of decentralized protocols (blockchains), and are known as Dapps (decentralized apps). As of May 2021, there is more than $130 billion locked in DeFi across roughly 100 platforms!