DeFi or Decentralized Finance is a term used to describe a system of financial applications and services that operate on decentralized networks, primarily blockchain platforms. Their main goal is to create open, transparent, and accessible to everyone financial systems, without relying on traditional financial intermediaries, for example, banks. These platforms and protocols allow individuals to lend, borrow, trade, and invest in various digital assets without intermediaries.

DeFi applications are created on blockchain networks, like Ethereum, and utilize smart contracts to automatically handle financial transactions. These applications can include decentralized exchanges, lending and borrowing protocols, prediction markets, insurance platforms, and more.

DeFi has significant advantages, including openness, transparency, and accessibility for everyone, regardless of their location or financial situation. Additionally, it provides enhanced security by giving users direct control over their funds and eliminating the need to rely on third-party intermediaries.

Nevertheless, it's essential to acknowledge that DeFi is a relatively new and experimental domain, carrying potential risks such as smart contract vulnerabilities, security breaches, and market fluctuations.