Decentralized Finance (DeFi)
By CoinGecko | Updated on Mar 03, 2020
Decentralized Finance (DeFi) refers to the movement of building decentralized financial applications that have no central authority and is censorship free.
DeFi applications cover many use cases and a few popular ones are stablecoins, lending/borrowing and trading (decentralized excanges). By removing the middleman in systems, DeFi applications are able to achieve a better rate of returns for its users, while lowering barrier of entry as the application does not discriminate or censor any particular party from joining.
Related Terms
Liquid Proof of Stake (LPoS)
A proof of stake consensus mechanism by Tezos that slightly differs from Delegated Proof of Stake.
Central Bank Digital Currency (CBDC)
It is a digital fiat currency issued by the central banks, contrary to cryptocurrency that issued by non-legislative party.
Hybrid PoW/PoS
It is the allowance for both Proof-of-Stake and Proof-of-Work distribution consensus to work on the same network.
Cold Wallet
Wallets that are offline and require physical access to certain devices (eg. hardware wallet, paper wallets)
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