This in an excerpt from this book
The expression, Decentralized finance (popularly called DeFi), refers to an innovative financial domain that uses blockchain technologies or smart contracts, the most prevalent being Ethereum. It diverts its route to cryptocurrency usage instead of relying on traditional money market intermediaries, including brokers, economic platforms, or financial institutions.
DeFi programs allow individuals to borrow or lend funds from other firms or individuals, provide opportunities for speculation on market fluctuations on a range of assets using trade cryptocurrencies, derivatives, risk insurance, and collect interests similar to income from a bank savings account. High-interest rates are advertised by some DeFi providers, with some applications offering triple-digit rates of interest at high risk.
Individuals are basically involved in lending practices when they invest money in a reliable bank against accrual of interest in return. Cryptocurrency in terms of the DeFi lending process is undertaken in yield farming. People are entitled to interest and windfall gains in exchange, but these are less relevant than the process of subsidizing interest with handouts of new units of DeFi.
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