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What is DeFi?
Decentralized Finance is an alternative to traditional methods of financial interaction, transaction and exchange, which are typically governed by traditional banks and regulatory organisations. In short, a decentralized financial system is one in which financial services are available on an open-source decentralized network without the need of TTP(Trusted Third Parties).
A blockchain network is based on chunks of data or blocks that form a chain. Once a block is full, it will connect onto a previously filled block, because of this the ‘chain’ in the blockchain arises. All transactions entering the system will be spread across the world through decentralized, Peer-to-Peer network and transmitted into a sequence of computers. These computers will validate a transaction by solving complexable equations. Once the transaction is validated and chained onto previous blocks, it will form a long chain history of transactions that are permanently verifiable across the network.
The attention towards DeFi has been growing in recent years. The DeFi systems use open-source technologies and proprietary software to secure and verify transactions. DeFi has given everyone access with connection to the network to engage in financial products and services. As a result, we no longer require the authentication and security of transactions to be provided by central institutions.
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