DeFi (Decentralised Finance)
Quick Answer
DeFi is the ecosystem of financial applications on blockchain that operate without banks, powering the DEX aggregators and liquidity pools used in crypto payment settlement.
Full Definition
Decentralised finance is the ecosystem of financial applications built on blockchain networks that operate without traditional intermediaries like banks. DeFi protocols provide lending, borrowing, trading, insurance, and yield farming through smart contracts. For crypto payments, DeFi infrastructure powers DEX aggregators used in payment routing, liquidity pools used for token swaps during settlement, and stablecoin protocols that underpin fiat-equivalent settlement.
Related Terms
DAO (Decentralised Autonomous Organisation)
A DAO is an organisation governed by smart contracts and token-holder voting rather than traditional corporate structures, used in some payment protocols for governance.
dApp (Decentralised Application)
A dApp is a software application running on a blockchain rather than a centralised server, including payment widgets that merchants embed to accept crypto directly.
DEX (Decentralised Exchange)
A DEX is a peer-to-peer marketplace for trading crypto directly from wallets without depositing funds with a centralised intermediary.
DEX Aggregator
A DEX aggregator sources liquidity from multiple decentralised exchanges to find the best swap rate, used in payment processing to optimise exchange rates during settlement.
Digital Asset
A digital asset is any asset in digital form with distinct ownership rights on blockchain, including cryptocurrencies, stablecoins, NFTs, and tokenised real-world assets.