Glossary · from the DESK dictionary
DeFi
Financial services (lending, trading, interest) run via smart contracts without central intermediaries.
In plain words
Banking without a bank — lending, trading, or earning interest directly through code on a blockchain.
In more detail
DeFi denotes financial services running via smart contracts on public blockchains without central intermediaries — trading, lending, derivatives and asset management. The advantages are access without vetting, auditable code and composability of protocols. The risks are equally structural: coding errors are irreversible, no deposit insurance exists, and composability transmits one protocol's failure to every other built on it.
Example
One protocol uses another's price data. When that is manipulated, the first loses 78 million dollars — through no fault of its own, purely through the dependency.
What it means for traders
One of the fastest-growing segments of the crypto market, aiming to replace traditional financial infrastructure.
Common pitfalls
Smart-contract bugs, lack of regulation, and high volatility of posted collateral are key risks.
Related terms
0x Protocol · Decentralized Applications (dApps) · Decentralized Exchange (DEX) · Smart Contract · Stablecoin · Total Value Locked (TVL) · Yield Farming
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.