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Decentralized finance (DeFi) is a new way of handling financial transactions using decentralized protocols built on the Ethereum blockchain. These protocols allow users to interact with each other directly, without the need for intermediaries such as banks or government agencies. Because DeFi transactions are carried out on the blockchain, they are transparent and secure. Furthermore, because there is no central authority controlling the DeFi protocols, they are open to anyone with an Ethereum wallet.
One of the main reasons why DeFi is trending is that it offers users the ability to earn staking rewards and interest on their investment. In traditional finance, it is difficult to earn a return on investment unless you invest in high-risk assets. However, with DeFi, anyone can earn interest simply by staking their crypto assets in a protocol. This makes DeFi an attractive option for risk-averse investors who want to grow their portfolio without taking on too much risk.
Another reason why DeFi is growing in popularity is that it allows users to lending and borrowing platforms. On traditional lending platforms, such as banks, borrowers must go through a lengthy application process and pay high interest rates. However, on DeFI lending platforms, such as MakerDAO, borrowers can use their own assets, such as Bitcoin, to use as collateral to either use as…
