DeFi refers to a collection of financial services and applications built on blockchain technology, primarily Ethereum. Unlike traditional finance, which relies on centralized institutions to facilitate transactions and manage assets, DeFi operates through decentralized protocols, smart contracts, and decentralized applications (DApps).

In essence, DeFi aims to recreate traditional financial services in a decentralized manner, enabling users to borrow, lend, trade, and invest without the need for intermediaries. This decentralized nature of DeFi offers several advantages, including increased accessibility, transparency, and security.