What is DeFi? The Quick Guide for Crypto Investors

man holding a piggy bank

What is DeFi?

DeFi, short for Decentralized Finance, is like a big online bank. But instead of being run by a company or people, it’s run by computer code. It’s built on something called blockchain, which is like a digital ledger that everyone can see and no one can cheat.

Imagine you’re playing a game of Monopoly. Normally, one player is the banker who gives out money, takes it in, and makes sure everyone is following the rules. But what if instead of a banker, you had a super smart robot who knew all the rules, couldn’t make mistakes, and was fair to everyone? That’s kind of what DeFi does for real money.

DeFi, short for Decentralized Finance, is like a big online bank.

People use DeFi to do things they usually do with a bank, like borrowing and lending money, without having to ask permission from anyone. It’s like having your own bank in your pocket.

However, just like any game, there can be risks and things can go wrong. So it’s important to understand the rules and play wisely!

Investor Takeaway

Investing a bit of your money in DeFi is like planting a small seed in your investment garden. With time and care, this seed might grow into a big tree, making your garden more valuable and interesting.


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