DeFi

DeFi (decentralised finance) is the ecosystem of financial protocols built as smart contracts — trading, lending, derivatives, insurance, yield — with no company as counterparty. The core primitives compose like Lego: DEXes give you trading, lending pools (Aave, Compound) give you borrowing against collateral, CDPs let you mint stablecoins, and anyone can plug them together. A flash-loan arbitrage that sources capital from Aave, routes through Uniswap and Curve, and repays in the same transaction would be impossible in TradFi — the settlement times alone would kill it. The honest trade-offs: UX is still bad, smart-contract bugs mean occasional total losses, gas fees price out small users on L1, and "decentralised" often means "with a governance multisig that can still rug you". But the composability is genuinely novel, and the space has gone from $0 to $80B+ TVL in five years.