Decentralized finance, often referred to as DeFi, is a financial system built on blockchain technology that allows people to conduct transactions without intermediaries like banks. It uses smart contracts—self-executing contracts with the terms directly written into code—to facilitate lending, borrowing, and trading of assets in a secure and transparent manner. In DeFi, users can access a variety of financial services, such as earning interest on their cryptocurrency holdings or trading digital assets, all while maintaining control over their funds. This system aims to create an open and accessible financial ecosystem, reducing reliance on traditional financial institutions.