Blockchain Finance

Definition ∞ Blockchain finance, often termed DeFi (Decentralized Finance), represents financial services built on distributed ledger technology. It allows for peer-to-peer transactions, lending, borrowing, and trading without traditional intermediaries. This system utilizes smart contracts to automate agreements and manage assets, aiming for greater transparency, accessibility, and efficiency. Its growth signifies a substantial shift in how financial operations can be conducted.
Context ∞ The realm of blockchain finance is currently a focal point of innovation and regulatory debate. News concerning the total value locked (TVL) in DeFi protocols, the development of new decentralized exchanges (DEXs), or regulatory frameworks attempting to govern these novel financial instruments are prevalent. Discussions often address the security of smart contracts, the potential for systemic risk, and the ongoing efforts to bridge traditional financial systems with decentralized alternatives.