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What is a DeFi?

Decentralized finance (DeFi) is a new financial system that is built on safely distributed ledgers, much like the ones used by cryptocurrencies.

The Securities and Exchange Commission (SEC) and Federal Reserve set the rules for centralized financial institutions like banks and brokerages in the U.S., where customers go to directly access capital and financial services. By giving people access to peer-to-peer digital trades, DeFi threatens this centralized financial system.

DeFi reduces the usage fees that banks and other financial institutions impose on customers. Anyone with an internet connection can use DeFi, and users can store money in a safe digital wallet and transfer money quickly. The world of decentralized finance is always changing. It is unregulated, and its ecosystem is full of fraud, hacks, and infrastructure errors.