Decentralized finance (DeFi) platforms offer financial services without traditional intermediaries from "summary" of Blockchain Technology Explained by Alan T. Norman
Decentralized finance (DeFi) platforms represent a groundbreaking shift in the world of finance by offering financial services without relying on traditional intermediaries. Instead of depending on banks or other financial institutions to facilitate transactions and provide services, DeFi platforms operate on blockchain technology, allowing users to interact directly with one another in a peer-to-peer fashion. These platforms enable users to access a wide range of financial services, including lending, borrowing, trading, and investing, all without the need for a central authority to oversee or regulate these activities. By eliminating intermediaries from the equation, DeFi platforms aim to increase efficiency, reduce costs, and promote financial inclusion for individuals who may not have had access to traditional banking services. One of the key features of DeFi platforms is their use of smart contracts, which are self-executing contracts with the terms of the agreement directly written into code. Smart contracts automatically enforce the rules and conditions of a transaction, eliminating the need for a third party to oversee or validate the agreement. This automated process helps to reduce the risk of fraud and human error, making transactions more secure and efficient. Additionally, DeFi platforms often utilize decentralized exchanges (DEXs) to enable users to trade assets directly with one another. Unlike traditional centralized exchanges, which require users to deposit their assets into a central account controlled by the exchange, DEXs allow users to retain custody of their assets throughout the trading process. This not only enhances security but also gives users greater control over their funds.- DeFi platforms are revolutionizing the way financial services are accessed and operated by empowering individuals to take control of their finances and interact with one another in a trustless and decentralized manner. Through the use of blockchain technology, smart contracts, and decentralized exchanges, DeFi platforms are paving the way for a more inclusive, efficient, and transparent financial system.
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