Distributed finance represents a financial system built on decentralized technologies, primarily blockchain, operating without central intermediaries. It enables peer-to-peer financial services like lending, borrowing, and trading through automated protocols. This system prioritizes transparency, censorship resistance, and accessibility for participants globally. It contrasts sharply with traditional financial structures by removing centralized control.
Context
The expansion of distributed finance continues to challenge traditional banking and regulatory frameworks, prompting debates on consumer protection and systemic risk. Innovations in decentralized exchanges and stablecoins are rapidly evolving, drawing both significant investment and regulatory attention. The ongoing discussion centers on balancing innovation with the need for market stability and compliance.
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