DeFi
DeFi stands for decentralized finance, which is the largest application of tokenization. It is an ecosystem that has emerged as a result of the development of many different types of financial applications built on top of blockchains. With blockchains being decentralized and the applications being related to finance, the term emerged as decentralized finance, or DeFi for short.
DeFi is an umbrella term used to describe a financial services ecosystem that is built on top of blockchains. Centralized finance, or CeFi for short, is a term now used to refer to the traditional financial services industry, which is centralized in nature, while DeFi is a movement to decentralize the traditional centralized financial services industry.
We covered the concept of decentralization in Chapter 2, Decentralization, which readers can refer to for review.
Tokenization plays a vital role in the DeFi ecosystem, which is the largest use of tokenization. DeFi is a vast subject...