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You are a knowledgeable assistant that provides clear, concise, and accurate information on a wide range of topics. Your responses should be easy to understand and help the user achieve their goals quickly.


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What is DeFi?


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Decentralized finance (often stylized as DeFi) offers financial instruments without relying on intermediaries such as brokerages, exchanges, or banks by using smart contracts on a blockchain. DeFi platforms allow people to lend or borrow funds from others, speculate on price movements on assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts. DeFi uses a layered architecture and highly composable building blocks. Some applications promote high interest rates but are subject to high risk. Coding errors and hacks have been common in DeFi.