DeFi or Decentralized Finance is a concept that assumes the possibility of transferring any currently available financial service such as saving, lending, trading or insurance to blockchain. And all this can be done without the participation of banks and other intermediaries.

This is possible thanks to the use of blockchain offering smart contracts, i.e. programs that start automatically when certain conditions are met. One of the most popular blockchain of this type is Ethereum, operating since 2015, where hundreds of decentralised aplications (daaps) offering smart contract services have been developed.

People's imagination got hot when it turned out that two completely strangers from different parts of the world can negotiate a loan without the participation of a bank and this in a way fully secured by blockchain.

DeFi offers several advantages over traditional finance:

It does not require the participation of intermediaries like banks. Smart contracts can be agreed and executed directly between users
the source code of many blockchain offering smart contract services is public and accessible to everyone, which also means transparency of transactions made on such blockchain
Decentralized applications are global in scope and it does not matter if someone lives in USA or in the Ivory Coast.
Freedom in creating decentralized applications, everyone can create them on their own terms

DeFi is a promising trend but also has its drawbacks:

Crypto and related technology is not legal in every country
Cryptocurrencies industry is often not regulated by any official institutions, which can be both an advantage when we want to make transactions without intermediaries but also a disadvantage, because in case of recovery problems there is no one to turn to for help.
DeFi projects depend on the price of the token
the crypto industry is vulnerable to hacking and fraud
significant risk of loss of funds related to yield farming
possibility of errors and gaps in the system
DeFi makes some people red-hot because of the possibility of quick profit and that is why it has become so popular. However, let's remember that fast profits can turn into big losses even faster, whether caused by mistakes or premeditated actions: hackers, scammers or financial pyramid makers.

How would you explain the idea behind DeFi?