Glossary · DeFi
DeFi
Also: decentralized finance, decentralised finance
DeFi, short for decentralized finance, is the set of financial services built as public smart contracts on a blockchain, so that lending, trading and issuance run as code anyone can inspect and use without an account at an intermediary.
Related terms
- Smart contract
- A smart contract is a program deployed to a blockchain that holds assets and executes its rules automatically when called, so the terms of an agreement are enforced by the network rather than by a counterparty.
- Total value locked
- Total value locked, usually abbreviated TVL, is the dollar value of assets deposited in a protocol's contracts, used as a rough size measure that rises and falls with token prices as well as with deposits.
- Liquidity pool
- A liquidity pool is a smart contract holding reserves of two or more tokens that traders swap against at a price set by a formula, with the depositors earning a share of trading fees.
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