DeFi, Decentralized Finance, that is, "decentralized finance", refers to the decentralized finance that runs on blockchains and other decentralized Ecosystems of financial applications on centralized networks, such as Ethereum, are generally not controlled by any central authority or intermediary. Instead, theyuse smart contracts on decentralized networks to execute and be bound by the terms of transactionsenabling users to complete transactions directly without the involvement of traditional financial institutions. This model offers greater transparency and accessibility compared to traditional finance (TradFi). But whether its security is really better than traditional finance is still controversial.

What is a smart contract? How do smart contracts work? Please refer to the "What is a smart contract" chapter.

Typical DeFi financial services include: lending, trading, revenue mining, etc. Users need to use a crypto wallet and cryptocurrency and interact with the protocol’s smart contracts to access these services. Here are some examples of DeFi applications:

• Decentralized Exchanges (DEXs): These exchanges allow users to trade cryptocurrencies directly without middlemen. Some well-known DEXs include Uniswap, PancakeSwap, and SushiSwap.
• Decentralized lending: This type of platform allows users to lend or borrow cryptocurrencies from a public asset pool without the need for a bank or borrower. Some well-known DeFi lending platforms include Aave, Compound, and MakerDAO.
• Decentralized Stablecoins: As the name suggests, cryptocurrencies designed to maintain a stable value are often pegged to fiat currencies such as the U.S. dollar. Some well-known decentralized stablecoins include DAI and FRAX.
• Revenue mining: refers to users receiving rewards by providing liquidity to the DeFi platform. Rewards come in various forms, such as new tokens, fees or governance rights. Some well-known yield mining platforms include Yearn Finance, Convex Finance, and Alpha Homora.

The above is just the tip of the iceberg among the many current DeFi application types. Some mainstream DeFi ecosystems are listed below:

• Ethereum: Ethereum is the most popular and widely used DeFi ecosystem, benefiting from the first-mover advantage of smart contracts With the establishment of token standards such as ERC20 and ERC20, it has a large number of decentralized applications (DApps) and protocols deployed on its network, which can provide various financial services. Many star DeFi protocols such as Compound, Uniswap, Curve, Aave, etc. were first built on Ethereum.
• BNB Smart Chain (BSC): BNB Chain is a DeFi ecosystem led by Binance. After the 2020 DeFi Summer, in order to compete with Ethereum, Binance developed a public chain system that supports EVM. BSC (formerly known as Binance Smart Chain, later renamed BNB Chain) aims to provide a faster and cheaper option than Ethereum. The native token is BNB and the pass format is BEP20. BSC supports many DeFi protocols and tokens with the same functions as Ethereum, such as Pancakeswap, which is an AMM exchange, etc., and the gas price is low, so it once became a popular choice for users and grassroots projects.
• Solana: Solana is a high-performance blockchain with Proof of History as the consensus. It was once popular for its fast transaction speed and low fees. In the 2021 bull market, many DeFi protocols are being built on Solana. Well-known projects include: Serum of order book DEX, Launchpad Raydium, derivatives Mango, etc.
• Polkadot: Polkadot is a multi-chain ecosystem that allows different blockchains to connect and communicate with each other. This enables interoperability between different DeFi protocols and networks, allowing users to move assets between different platforms.
• Avalanche: Avalanche is a DeFi ecosystem designed to provide high throughput and low latency for decentralized applications. It also offers a range of DeFi protocols, including decentralized exchanges, yield mining platforms, and lending platforms.

It should be noted that the DeFi ecosystem is developing extremely fast, with new protocols and platforms being developed and launched every day. As a beginner, it is important to do your own research on DYOR and understand the associated risks before investing in any DeFi project or token.

In general, DeFi represents a new financial era that is open, transparent, and accessible to anyone with an Internet connection. At the same time, it has the potential to revolutionize the way we think about money and financial services.