Article

DeFi

August 22, 2026 · Aditya Gupta

Crypto & Blockchain

Decentralized Finance (DeFi) is the ecosystem of financial applications built on blockchain — primarily Ethereum — replicating traditional financial services without centralized intermediaries. Categories: lending/borrowing (Aave, Compound), decentralized exchanges (Uniswap, Curve), derivatives (dYdX), insurance (Nexus), yield aggregators (Yearn). Users interact via wallets and smart contracts. Benefits: 24/7 access, transparency, composability, no KYC for some protocols. Risks: smart contract bugs (hacks regularly drain millions), regulatory uncertainty, complexity, frontend phishing. Total Value Locked (TVL) in DeFi protocols: $50-150B depending on market cycle. DeFi remains a small fraction of traditional finance but innovates rapidly.

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