DeFi, staking and yield farming explained in simple terms

Decentralized Finance is on the rise!

Defi (Decentralized Finance) is a financial system that uses distributed ledger technology and blockchain networks to record, store and transfer of assets, as well as the management of assets); usually as opposed to traditional financial systems that are centralised and controlled by one centralised entity.

Defi has an emerging niche in the financial ecosystem since it combines elements of traditional finance, cryptocurrencies and DeFi with the use of blockchains.

Defi aims to increase accessibility to digital assets by breaking down barriers to participation and removing intermediaries through the use of distributed ledger technology.

The use of blockchain and distributed ledger technology as the backbone of decentralized finance is very promising, and it gives users the opportunity to be the owners of their assets instead of its custodian.

DeFi is also used to refer to the protocols that operate on the underlying blockchain, such as cryptocurrency exchanges, lending protocols, insurance products, or stablecoins.

The main purpose of blockchain is to create a transparent, censorship-resistant, and decentralized, distributed ledger technology.

Decentralized means it’s not controlled by a single organization, but by multiple groups of stakeholders.