What is DEFI? Decentralized Finance Explained (Ethereum, MakerDAO, Compound, Uniswap, Kyber)
DeFi or decentralized finance is a movement that aims at making a new financial system that is open to everyone and doesn’t require trusting intermediaries like banks. To achieve that defi relies heavily on cryptography, blockchain and smart contracts.
Smart contracts are the main building blocks of defi. If you don’t know what smart contracts are or you want to refresh your knowledge you can pause this video and watch my introduction to smart contracts video first.
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It’s worth noticing that currently most if not pretty much all of the defi projects are built on Ethereum. The main reason for this is the Ethereum’s fairly robust programming language called Solidity that allows for writing advanced smart contracts that can contain all the necessary logic for the defi applications, besides that Ethereum has the most developed ecosystem across all the smart contract platforms with thousands of developers building new applications every day and the most value locked in smart contracts which create an additional network effect. In fact, all the defi protocols mentioned in this video are built on Ethereum.
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