DeFi or decentralised finance is built upon blockchain networks and constitutes an eco-system of financial applications. DeFi eliminates intermediation of banks, brokers and other intermediaries. It uses programmes or computers to run certain projects. After adequate exposure to Bitcoin and Ethereum, institutions will get into DeFi and NFTs. Still the issue of trust remains as there is risk involved — contract to be trusted or coder they trust. Auditors and tech engineers are required who can bolster these smart contract codes.

There is increasing interest in this field which is attracting massive investments, crypto transfers and lending. DeFi was coined during an informal interaction among Ethereum developers in August 2018.

DeFi system is beyond borders. It is a parallel financial system that runs along with the traditional system.

These apps have codes which are open to scrutiny . A user can verify and track the protocols. They are able to locate their investment. It is an open source code — developers can build on the existing apps. It promotes innovations. A certain degree of control is exercised over the protocols by the teams that work on DeFi apps. If it is 100 per cent decentralised, it creates problems when there are issues.

These platforms do not require a bank account. Just access to crypto assets makes these platforms open. Anyone can transact. No particular company runs it. The foundation is the decentralised architecture.

Cryptocurrency transfers have been easier from one country to another — no need to convert from one currency to another.