DeFi Strategies

Definition ∞ DeFi strategies are systematic approaches employed by participants within decentralized finance ecosystems to generate returns or manage risk. These strategies leverage various financial instruments and protocols available on blockchain networks. They can range from simple yield farming to more complex arbitrage and lending operations.
Context ∞ Current discussions surrounding DeFi strategies frequently address their inherent risks, including impermanent loss and smart contract vulnerabilities. A significant debate pertains to the regulatory oversight of complex DeFi products. Future developments to monitor include the institutionalization of DeFi strategies and the emergence of more sophisticated risk management tools.