Length: 24:15 minutes | Topics: Blockchain, DeFi, Smart Contracts, Financial Inclusion
What is Decentralized Finance?
DeFi applications leverage blockchain technology to build decentralized financial platforms without traditional intermediaries like banks. These systems enable peer-to-peer services like lending, borrowing, and trading through transparent smart contracts.
Key Features
- Transparent, auditable smart contracts
- 24/7 global accessibility
- No need for trust in financial institutions
Common Use Cases
- Lending platforms like Aave
- Decentralized exchanges (Uniswap-like platforms)
- Stablecoins and crypto savings accounts
Challenges in the DeFi Space
Security Vulnerabilities
Smart contracts can contain vulnerabilities like reentrancy issues, which led to massive exploits in 2023-2025.
Regulatory Uncertainty
Many governments are still determining how to classify DeFi offerings legally.
Scalability Issues
High transaction costs and low throughput remain challenges for mass adoption.
Smart Contract Example
pragma solidity ^0.4.24;
contract SimpleDeFi {
function deposit() public payable { /* code here */ }
function loanTokens() public { /* code here */ }
function swap() public { /* code here */ }
}
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