In the wake of the DeFi Summer of 2020, DeFi continues to scale in popularity in the financial services world. Up until March of 2021, the total value of DeFi contracts accounted for over $41 billion. The disruptive financial technology aims to democratize financial services through a permissionless open source system. DeFi holds a significant appeal for individuals who may not have access to funding sources or traditional banks and financial institutions.
What is DeFi?
DeFi or decentralized finance refers to a system of dapps or decentralized apps, protocols, smart contracts and digital assets built on top of a decentralized public blockchain like Ethereum. DeFi is essentially the space where financial products and services exist without the oversight of intermediary financial institutions such as banks, credit unions, insurance funds and brokerages. Dapps are building blocks of DeFi and refer to the digital programs or web services that run on a blockchain. Ethereum is the most widely used blockchain that supports the majority of dapps in existence.
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