DeFi (Decentralized Finance) is an ecosystem that tries to deliver financial services through smart contracts, without a central intermediary like a bank or broker. It can include things like DEXs, lending/borrowing, liquidity pools, staking, and yield farming.
DEX
A protocol that lets you swap tokens through a liquidity pool or order system, instead of a central exchange.
Liquidity Pool
Users deposit an asset pair to provide swap liquidity. You can earn fee rewards, but there's risk involved.
Lending/Borrowing
A smart contract system that lets you lend or borrow against collateral. It carries liquidation risk.
Impermanent Loss
A type of loss that can happen to liquidity providers when the price ratio between tokens shifts.
⚠️ Safety Note
Don't trust claims like high APY, guaranteed yield, or risk-free earnings. DeFi carries real risks — smart contract bugs, liquidation, impermanent loss, oracle failures, and rug pulls.
DeFi can be powerful, but it isn't necessarily an insured, supported environment the way a bank account is.