Decentralised finance refers to financial services that run on public blockchains and smart contracts, including activities such as lending and borrowing, trading of assets, and earning of interest.
Smart contracts are self-executing contracts that run on code, which removes the need for a third party or centralised authority such as banks (hence the word “decentralised” in decentralised finance).
Without financial intermediaries, DeFi is able to achieve lower costs, faster speeds, and higher returns than in traditional finance.