What is DeFi?

Decentralized Finance or "DeFi", is the current movement driving most of the cryptocurrency industry's growth. Overall, its ultimate goal is to build a new blockchain-driven financial system that offers the same products that the current financial system does in a decentralized environment.

DeFi is often used to refer to the space that contains applications (DApps) on the Ethereum network that let you buy, sell, trade, borrow and earn interest on cryptocurrencies. Out of all of these examples, services that allow for “decentralized lending”(peer-to-peer services where you can borrow cryptocurrencies or supply them in return for interest) are the ones that launched the Ethereum DeFi movement to the heights it has reached today.

Does DeFi apply only to the Ethereum network?

In short, no.

Truthfully, DeFi should be used to refer to anything that's a legitimate project in the cryptocurrency space since both crypto and "DeFi" have the same goal of making everything in the global financial system "decentralized" and "tokenized." If you’re unfamiliar with these terms, think “run by its users” and “hosted on the blockchain.”

Why should I care about DeFi?

"Decentralizing" and "tokenizing" the global financial system means both putting it all on the blockchain and in smart contracts. This, in turn, means allowing anyone to make any sort of investment, anytime, with the speed and reliability of a cryptocurrency network.

Though the DeFi movement is currently mainly under the umbrella of the Ethereum network, it's reasonable to expect it to take over the cryptocurrency space in the long term. Decentralizing the financial system means making it peer-to-peer run and, therefore, decentralized just as Bitcoin is.

Start with crypto today

Sign up on NBX, a trusted Norwegian cryptocurrency exchange and custodian, and kickstart your crypto journey safely.
Crypto 101
Explore the most popular crypto terms and find answers to your questions.

What is Ethereum?

Read

Is it worth owning Ethereum?

Read

What is DeFi?

Read

What is Proof-of-Stake?

Read

What is a crypto trading bot?

Read

How is blockchain secured?

Read

How is Bitcoin network secured?

Read

What is staking?

Read

How much shall you invest in cryptocurrency?

Read
Blog

Insights, Trends, Analysis

Unraveling the cryptocurrency industry revolution.
#crypto101

Norwegian Block Exchange Catalyst F12 votes

The article summaries the NBX owned pool pledge vote on Catalyst F12 as a part of the Cardano ecosystem.
2 minutes
2024-07-09
#crypto101

Cardano showed resilience and community spirit during DDoS attempt

Yesterday during the epoch 493 Cardano witnessed an attempt of a denial-of-service (DDoS) attack.
2 minutes
2024-06-26
#crypto101

A short article on Uniswap

A short article on Uniswap with links to our price pages for Uniswap.
2 minutes
2024-05-29
Cookie Consent

By clicking “Accept”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.