DeFi or Decentralized Finance has been one of the hottest emerging areas ever in the crypto industry so far. The form of Defi operation is somehow the same as CeFi (Centralized Finance) but in the Defi environment, financial tools are used differently, under the control of the owners rather than any intermediaries or banks.
For Defi, various techniques and strategies are made to facilitate more opportunities to create both active and passive income. One of these is yield farming that takes the lead in crypto trends in drawing users’ attention. If you want to know what yield farming is, this article is for you.
What Is Defi?
So far, cryptocurrency is assumed as an ideal solution to the traditional financial system (or well known as Cefi) which has been suffering from various issues. Decentralized finance allows you to access tokens as the conventional banks or financial institute’s permission to your money under their management. Activities with the bank will be conducted the same (deposit. Withdraw, spend, borrow, lend, etc.). With a quick comparison, DeFi and Cefi share no big difference in terms of interaction.
Decentralized finance is not a single entity, but an ecosystem involving DApps, smart contracts, and protocols. These elements will differentiate conventional banks with decentralized space by providing their services under trustless codes. DeFi is conceptualized with the idea of operating without any middleman like a bank, which might lower the transaction fee, limit authorities to interfere with their funds, and access