What is DeFi and How Does it Work

Mar 1, 2025

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Ibiam Wayas

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DeFi or decentralized finance is an umbrella term that applies to an array of crypto and blockchain applications.

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DeFi is purposed towards dethroning centralized financial powers like exchanges such as Binance, Coinbase, etc., wallets, lending platforms, and many others.

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DeFi is another aspect of the crypto industry that aims to draw a stark difference in centralized banks’ norms.

What is a DeFi in crypto?

The primary difference between DeFi and CeFi is custodial methods. Decentralized finance provides financial control to users, while CeFi does not.

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Some exchanges of DeFi protocols are Uniswap, a decentralized exchange; Aave, a decentralized lending platform; dYdX, a decentralized trading platform.

What is an example of a DeFi?

With the introduction of more dApps, the DeFi ecosystem grows and becomes a more efficient market.

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You can earn money in DeFi by participating in various ways, such as lending, trading, or providing liquidity.

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How to earn on DeFi?

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