What Is DeFi?

DeFi stands for Decentralized Finance. It refers to financial transactions - lending, borrowing, trading, earning yield - carried out on a blockchain without banks, intermediaries, or regulatory gatekeepers.

In short: code instead of banks, smart contracts instead of intermediaries.

What Can You Do in DeFi?

• Swap: Exchange one token for another. Protocols like Uniswap and Curve.
• Lending / Borrowing: Borrow against your crypto as collateral, or lend to earn interest. Protocols like Aave and Compound.
• Yield farming / Liquidity providing: Provide tokens to liquidity pools and earn rewards.
• Staking: Lock tokens to support network security and earn rewards in return.
• NFT markets: Buy and sell digital assets on-chain.

How Is DeFi Different from Traditional Finance?

Traditional finance: opening a bank account requires ID, address, and bank approval. Interest rates are set by the bank. Movement is limited to business hours.

DeFi: an internet connection and a wallet are enough. No identity verification. 24/7 access. Interest rates are determined by supply and demand.

DeFi Risks

• Smart contract vulnerabilities: A code bug can allow funds to be drained
• Impermanent loss: A specific risk for liquidity providers
• Rug pulls: Fraudulent projects drain liquidity and disappear
• Market volatility: Investments can lose value quickly

KriptoK and DeFi

KriptoK lets you connect to DeFi protocols via WalletConnect. You can use platforms like Uniswap, Aave, and OpenSea directly from your wallet. See our WalletConnect guide.