Introduction to DeFi and its Impact on Trading

Decentralized Finance (DeFi) refers to financial services—such as lending, borrowing, trading, and earning interest—conducted without intermediaries, using smart contracts on blockchain platforms like Ethereum.

Core DeFi tools:

• DEXs (Uniswap, Curve, SushiSwap)
• Lending protocols (Aave, Compound)
• Yield farming & staking platforms
• Synthetic assets and stablecoins

DeFi for traders:

• Enables liquidity provision and yield generation
• Offers leverage without centralized oversight
• Provides access to flash loans and arbitrage opportunities

Risks include:

• Smart contract vulnerabilities
• Impermanent loss
• Rug pulls and scams
• Regulatory uncertainties

DeFi is reshaping financial systems, but it requires caution and due diligence.