Decentralized finance, or “DeFi,” is a catch-all term for the various financial protocols and platforms built on Ethereum. These protocols and platforms provide a wide variety of financial services, ranging from lending and borrowing platforms to stablecoins and tokenized BTC.
While DeFi protocols and platforms have been growing in popularity in recent months, there are still a number of challenges that need to be addressed before they can be widely adopted. For one, most DeFi protocols are still in their early stages of development and have yet to be battle-tested.
Additionally, the Ethereum network itself is not yet ready to handle the high volume of transactions that would be required if DeFi were to be widely used.
Despite these challenges, the potential of DeFi is huge. If the various protocols and platforms can overcome the challenges listed above, then we could see a major shift in the way financial services are provided.
With DeFi, we would have an open financial system that is accessible to anyone with an Internet connection.