ABSTRACT
Decentralised Finance (DeFi) is an ecosystem of protocols that enable permissionless and transparent finance. Its aim is to disintermediate traditional financial institutions by creating decentralised analogues to financial products and services. This chapter examines the origins of DeFi and its core innovations, such as stablecoins, Decentralised Exchanges (DEXs), Automated Market Makers (AMMs), Liquidity Pools (LPs), borrowing/lending protocols, oracles and bridges. It ends with a discussion of the risks and potential of DeFi.
