I am not much of a big term user… nothing concern me with technical terms as long as you understand in layman terms what DEFI is all about and how to use the knowledge of defi in making money in this space.
We basically have 2 major parts in crypto.
There is Centralized finance (CEFi)
And Decentralized Finance (Defi)
CEFi relates with the use of centralize exchanges like binance, kucoin, bybit and others in trading cryptocurrency.In CEFi, the centralized exchanges have full control over your funds, when they go bankrupt, your funds might be gone with them.A very good example of a case like this is the FTX saga around last year where many investors loose money to that centralize exchange. I’m part of the ppl who loose money there, just that my funds are not really much in there. About $50.That’s where we came about the popular saying in Defi “not your key, not your fund”.
Although there is no how you will trade Defi and won’t still need to do some trading through the use of the centralized exchanges. Just that we don’t keep funds there.
Let’s leave the part of centralize exchange as we are not really here for that… Maybe after the Defi class we may run some lectures on how to trade spot on centralize exchange for the benefit of newbies that doesnt know how to do that.
Full meaning of Defi is Decentralize Finance.Decentralized- Anybody who studied government should remember what decentralization means. Decentralization simply Means sharing of power among the arms of government, in Decentralized system of government, each arm has its own function. there is no middleman or admin to control how the shared powers are applied.Now, putting decentralization into this case. Decentralized finance allows you to buy, sell or swap without any third party or Middleman. You are the full controller of your funds.
Finance means economic activities that include buying,selling, lending, fixed deposit, bonds, segniorage e.t.c.All these activities are applicable in real life use cases and are also applicable in DEFI.DEFI offers the Privacy, anonymity and transaction speed our banks could not offer us. Privacy in the sense that you do not need to register your information on any decentralized exchange (dex) to use them like we do on centralized exchange where they ask for your informations, house address, and government issued ID.Do we all understand the concept of defi?
TRANSACTING without the use of MIDDLEMAN or ESCROW
this is the summary of my whole story. To be continued