--- title: "DeFi (Decentralized Finance)" url: "https://www.unknowngravity.com/en/glosario/defi-finanzas-descentralizadas" site: Unknown Gravity published: "2025-06-07T15:04:00+00:00" modified: "2026-07-15T10:51:28+00:00" language: en-US description: "DeFi (Decentralized Finance) is an ecosystem composed of protocols, platforms and financial services developed on public blockchains (mainly Ethereum and EVM-compatible networks) that allow users to…" section: "Home > DeFi (Decentralized Finance)" --- # DeFi (Decentralized Finance) GLOSSARY · BLOCKCHAIN & WEB3 Ecosystem of financial applications that operate on blockchain without traditional intermediaries such as banks. WHAT IS IT? · FOR DUMMIES **DeFi**, or **decentralized finance**, is like a set of digital banks that don't have bosses, offices or schedules. Everything works thanks to automatic programs called **Smart Contracts** on blockchain. You can **lend, borrow, earn interest or exchange cryptocurrency** without having to ask anyone for permission or depending on a bank. WHAT IS IT? · PRO **DeFi (Decentralized Finance)** is an ecosystem composed of **protocols, platforms and financial services** developed on **public blockchains** (mainly Ethereum and EVM-compatible networks) that allow users to access products such as loans, exchanges, insurance, derivatives and savings accounts, all in a way **programmed, automated and without centralized intermediaries**. These services are executed through **Smart Contracts** that: - They manage digital assets (tokens). - They execute business logic in an immutable and transparent way. - They interact with each other through open, composable standards. Key examples of DeFi protocols include: - **Decentralized Exchanges (DEX)** such as Uniswap, SushiSwap, or Curve. - **Lending and collateralization platforms** such as Aave, Compound or MakerDAO. - **Decentralized stablecoins** such as DAI or LUSD. - **Liquidity providers** and farming like Yearn, Balancer or Convex. - **Derivative, safe or synthetic active protocols** such as Synthetix or Nexus Mutual. Among the features that define DeFi: - **No custody**: the user maintains full control over their funds through their wallet. - **Global access without permissions**: Anyone with an internet connection can participate. - **Interoperability**: the protocols are combined together like “money legos”. - **Full automation**: The rules are programmed and executed without human intervention. - **Full transparency**: The code and transactions are publicly available on the blockchain. DeFi proposes a structural transformation of the traditional financial system, opening up access to advanced services without the need for bank accounts, credit history or nationality. However, it also faces significant risks related to **malicious code, exploits, impermanent losses, manipulable oracles** and regulatory environments that are still uncertain. ## 01 / Key points - Financial services ecosystem without banks or central entities - Based on smart contracts on blockchain - Globally accessible with a wallet and internet connection - Completely transparent, programmable and interoperable - It requires self-management and knowledge of the operation of the protocol ## 02 / Advantages - **Elimination of intermediaries and reduction of costs** - **Open and uncensored access to financial services** - **Full transparency in rules, funds and operations** - **Accelerated and constant innovation in new products and strategies** - **Cross-platform interoperability (composability)** ## 03 / Disadvantages - **Risk of hacks and errors in the contract code** - **High volatility and exposure to impermanent loss** - **Lack of consumer protection in the event of a fault** - **Technical complexity and high learning curve** - **Legal uncertainty and possible restrictive regulation** RELATED CONCEPTS [Smart contract](/en/glosario/smart-contract) [Smart Contract](/en/glosario/smart-contract-contrato-inteligente) [Token](/en/glosario/token) [Decentralized Exchange (DEX)](/en/glosario/exchange-descentralizado-dex) [Liquidity Pool](/en/glosario/liquidity-pool-fondo-de-liquidez) [Fungible Token](/en/glosario/token-fungible) KEEP LEARNING [DeFi: What decentralized finance is and how does it work](/en/articulos/defi-que-son-como-funcionan-finanzas-descentralizadas) [How to protect your digital assets in the cryptocurrency world](/en/articulos/como-proteger-tus-activos-digitales-criptomonedas) [Comparison of smart contracts programming languages](/en/articulos/lenguajes-programacion-smart-contracts) [Tokenomics that work: How to design an economy that doesn't collapse in 6 months](/en/articulos/tokenomics-que-funcionan-como-disenar-una-economia-que-no-se-derrumbe-en-6-meses) [What Do Blockchain Developers Do?](/en/articulos/que-hacen-los-desarrolladores-blockchain) RELATED SERVICES [DeFi protocols](/en/servicios/protocolos-defi) [Smart contract auditing](/en/servicios/blockchain-security-audits) [Development of smart contracts](/en/servicios/company-development-smart-contracts) [Web3 Development](/en/servicios/desarrollo-web3) [Token issuance](/en/servicios/emision-de-tokens) [Full glossary](/en/glosario) This entry is informative. It is not legal, tax or investment advice. The rules cited change: check the current version on [BOE](https://www.boe.es) and [EUR-Lex](https://eur-lex.europa.eu).