Decentralized Finance is the new economic paradigm that will shortly overtake the legacy centralized transaction model of the past.
Decentralized Finance, or DeFi, is a new economic model based on the advent of cryptocurrencies, and specifically, blockchain technologies. Blockchain technology has not only been applied to crypto, but it will be used to replace the current global fiat currency regime. It has already been applied to currency transfers, non-fungible tokens (NFTs), smart contracts, healthcare, social media, supply-chain logistics, securitization of personal ID, and many government applications, to name a few.
Centralized finance utilizes banks, brokers, and other institutions to facilitate the movement of money within the economy. DeFi utilizes blockchain technologies to move money, store records, and even enforce contracts. By utilizing blockchain technologies, DeFi ensures that records are not tampered with and are maintained permanently on their respective distributed ledgers. Recent events have shown how adoption of blockchain technology and cryptocurrencies are becoming mainstream, and DeFi is rapidly advancing.