Mediatorless Protocols

Definition ∞ Mediatorless protocols are decentralized systems that enable direct interactions between parties without requiring a trusted third-party intermediary. These protocols typically operate on blockchain technology, using smart contracts to automate agreement execution and value transfer. They enhance censorship resistance, reduce transaction costs, and minimize counterparty risk. Examples include decentralized exchanges and peer-to-peer lending platforms.
Context ∞ Mediatorless protocols are central to the decentralized finance (DeFi) movement, challenging traditional financial structures by removing intermediaries. The situation involves continuous innovation in protocol design to improve security, scalability, and user experience. A critical future development is the integration of these protocols with traditional financial systems, subject to evolving regulatory frameworks.