Decentralized finance

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Decentralized finance (often stylized as DeFi) offers financial instruments and operations through smart contracts on a programmable permissionless blockchain, thus minimizing the reliance on intermediaries such as brokerages, exchanges, or banks.^[1] DeFi platforms allow people to lend or borrow funds from others, speculate on price movements of assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts.^[2] The DeFi ecosystem uses a layered architecture and highly composable building blocks.^[3] While some applications promote high interest rates,^[2] they are subject to high risks.^[4] Coding errors and hacks have been common in DeFi.^[5][2]