Decentralised Finance (DeFi)

Decentralised Finance (DeFi) is a term that describes the decentralised financial instruments, protocols and platforms that people use to manage their money without relying on traditional financial infrastructures such as banks, remittance platforms and currencies issued by governments.

It is a brand new money system that offers users an alternative to the old and outdated traditional financial system or provides access to important financial services where it is lacking. This new money system is powered by open, transparent smart contracts that can be used to perform a variety of tasks and accessed through simple user interfaces, similar to traditional banking apps.

These DeFi apps, built on decentralised blockchains , operate without a central administrative authority (banks, institutions, etc.) and allow users to interact with each other in a completely trustless way, as the underlying smart contracts automatically protect the counterparties involved in a transaction.

Anyone with a cryptocurrency wallet and an internet connection can interact with the world of decentralised finance - without credit checks or other barriers to entry.

Prerequisite for use

The requirements for use are few. First of all, an internet connection is required. A crypto wallet represents a kind of digital wallet that is needed to store cryptocurrencies. It is therefore a prerequisite for transactions with crypto coins.

This wallet can either be located with a provider or a hardware wallet is used. The data of the hardware wallet is secured with a unique recovery phrase.

Cryptocurrencies are never stored in the hardware wallet itself, but always in the blockchain. The hardware wallet only stores the private key. This private key opens the lock to the address on the blockchain where the assets actually reside. Since the blockchain is everywhere, you only need your hardware wallet to interact with your cryptocurrencies.