Intermediate10 min read
What Is DeFi?
A clear guide to decentralized finance, major protocol types, yields, and the real risk profile.
defiyieldliquidity
What DeFi includes
- Decentralized exchanges (DEXs), lending markets, stablecoin rails, and derivatives protocols.
- Users interact with smart contracts instead of traditional intermediaries.
How yields are generated
- Trading fees from automated market makers.
- Borrowing interest from lending protocols.
- Incentive emissions from governance tokens.
Risk controls
- Smart-contract exploit risk.
- Liquidity and slippage risk on thin pools.
- Stablecoin depeg and oracle failure risk.