What is DeFi (decentralized finance)?
DefinitionDeFi (decentralized finance) is a set of financial services, such as trading, lending, borrowing and earning yield, that run on public blockchains through smart contracts instead of banks or brokers. Anyone with a self-custody wallet can use them, with no account to open.
How DeFi works
In DeFi, the rules of a service are written into smart contracts on a blockchain such as Ethereum, other EVM networks, TON, Tron or Solana. You connect a self-custody wallet, sign a transaction, and the contract executes it. Your funds move from your wallet into the contract and back, and every step is visible on-chain.
- Decentralized exchanges for swapping tokens
- Lending and borrowing markets, usually against crypto collateral
- Stablecoins that hold a steady value against the dollar
- Staking and liquid staking
- Bridges that move assets between blockchains
What makes DeFi different
- Open: no sign-up and no identity check at the contract level, available around the clock
- Self-custodial: you keep your keys and decide when funds go into a contract
- Transparent: contract code and transactions are public
- Composable: one service can build on another, such as a token from one protocol used as collateral in another
Risks of DeFi
DeFi removes the middleman, and with it the safety net. If something goes wrong there is usually no support line, no chargeback and no deposit insurance.
- Smart-contract bugs and hacks, including attacks on bridges
- Liquidation when a loan’s collateral falls below the required level
- Impermanent loss for liquidity providers
- Phishing sites and malicious token approvals
- Admin keys or governance votes that can change a protocol’s rules
Where Waletifi fits
Waletifi is a self-custody wallet, the starting point for using crypto without a middleman. It brings related services into the app with every fee shown before you confirm: in-app swaps, cross-network transfers, TON staking where available and an on-chain escrow for P2P trades.
