Why DeFi is Disrupting Traditional Finance: A Beginner’s Guide

“DeFi” — You’ve heard the term, but what is it?

Decentralized finance, or DeFi for short, is a rapidly growing sector of the crypto economy that is shaking up the traditional financial system. Unlike traditional finance, which is centralized and controlled by a small group of large institutions, DeFi is built on decentralized networks, such as the Binance Smart Chain or the Ethereum blockchain, and is accessible to anyone with an internet connection. In this beginner’s guide, we’ll explain what DeFi is, how it works, and why it’s disrupting traditional finance.

What is DeFi?

DeFi is a collection of financial applications built on decentralized networks, such as BSC (Binance Smart Chain) or Ethereum. These applications, known as dApps, allow users to access financial services, such as lending and borrowing, without the need for intermediaries, such as banks. Instead, DeFi dApps use smart contracts, which are self-executing contracts with the terms of the agreement written directly into the code, to automate financial transactions.

One of the key advantages of DeFi is that it is open to anyone with an internet connection and a digital wallet, regardless of their location or credit history. This allows individuals in developing countries and those who are unbanked…