# Decentralized Finance (DeFi) Content type: Glossary Term Summary: Financial applications built on blockchain networks that operate without traditional intermediaries like banks or brokers. DeFi uses smart contracts to automate lending, borrowing, trading, and other financial services in a permissionless and transparent way. Related resources: - Cryptocurrency (Glossary Term): https://theblockchainlibrary.com/glossary/cryptocurrency - Stablecoin (Glossary Term): https://theblockchainlibrary.com/glossary/stablecoin - Token (Glossary Term): https://theblockchainlibrary.com/glossary/token - Wallet (Glossary Term): https://theblockchainlibrary.com/glossary/wallet - The Difference Between “Dead” Crypto and Quiet Crypto (Article): https://theblockchainlibrary.com/article/the-difference-between-dead-crypto-and-quiet-crypto - The Post-Hype Crypto Market: Who’s Still Building and Why It Matters (Article): https://theblockchainlibrary.com/article/the-post-hype-crypto-market-whos-still-building-and-why-it-matters - Bear Markets Don’t Want Price Predictions — They Want Orientation (Article): https://theblockchainlibrary.com/article/bear-markets-dont-want-price-predictions-they-want-orientation - Crypto Regulation Is Coming Fast: What It Means for Investors in 2026 (Article): https://theblockchainlibrary.com/article/crypto-regulation-is-coming-fast-what-it-means-for-investors-in-2026
intermediate

Decentralized Finance (DeFi)

Financial applications built on blockchain networks that operate without traditional intermediaries like banks or brokers. DeFi uses smart contracts to automate lending, borrowing, trading, and other financial services in a permissionless and transparent way.

Examples

  • A decentralized exchange (DEX) lets users trade tokens without a central order book.
  • A lending protocol lets users deposit crypto to earn interest or borrow against collateral.

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Related Terms

Cryptocurrency

A digital or virtual currency that uses cryptography for security and operates on a blockchain network, typically without a central authority. Cryptocurrencies enable peer-to-peer transfer of value without intermediaries.

Stablecoin

A cryptocurrency designed to maintain a stable value by pegging to an external asset, typically a fiat currency like the US dollar. Stablecoins provide price stability for DeFi applications, trading pairs, and as a bridge between fiat and crypto ecosystems.

Token

A digital asset created and transferred on a blockchain. Tokens can represent currency, governance rights, utility within a protocol, ownership of an asset, or virtually any programmable value. Tokens are typically created via smart contracts.

Wallet

A software program or hardware device that stores the cryptographic keys needed to access and manage cryptocurrency. Wallets do not store the currency itself — they store the keys that prove ownership of on-chain assets.

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