What Is DeFi? Lending, DEXs and Yield, Explained
Decentralized finance rebuilds banking with smart contracts. The core building blocks, and the risks beneath the yields.
DeFi replaces banks and brokers with code. Decentralized exchanges let you swap tokens from a wallet; lending protocols let you earn interest or borrow against collateral; and “yield” comes from fees, incentives and interest paid by borrowers.
The appeal is openness and transparency — anyone can audit the contracts. The danger is that the same code can be exploited, and high advertised yields often hide leverage or token-emission risk. Self-custody also means self-responsibility: there is no support line for a signed transaction.
This article is for information only and is not financial advice. Always do your own research before investing in crypto assets.
Written by
Aisha Chen
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