What is DeFi?

Decentralized finance, alternative to traditional finance

업데이트: 2026.01.19

Basic Concept of DeFi

DeFi (Decentralized Finance) refers to financial services that operate on the blockchain without central institutions. You can use various financial services such as lending, deposits, trading, etc. without traditional banks or financial institutions.

🌐 Decentralization: DeFi operates automatically through smart contracts without central institutions. This allows financial services to be provided without intermediaries in traditional financial systems.

Types of DeFi Services

Lending & Borrowing

You can provide collateral and borrow cryptocurrency, or deposit assets and receive interest. Unlike traditional bank loans, loans are possible with only collateral without credit checks.

Decentralized Exchanges (DEX)

Trade cryptocurrencies without intermediaries. Uniswap, SushiSwap, etc. are representative examples.

Yield Farming

Earn interest by providing liquidity to DeFi protocols. Higher returns are possible, but risks are also high.

⚠️ Risks: DeFi has risks of hacking incidents and code errors. High returns come with high risks. Gas fees and network congestion issues must also be considered.

Precautions

Without understanding the structure, approaching DeFi can lead to significant losses. It is essential to understand smart contracts and the protocol structure before participating.

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High Returns Possible

Can earn interest directly, higher returns than traditional finance

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Structure Understanding Required

Understanding smart contracts and protocol structure is essential

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High Risk

Hacking incidents, code errors, high returns come with high risks