DeFi Explained: What It Is, How It Works, and What You Can Do With It

When you hear DeFi, short for decentralized finance. Also known as decentralized finance, it means doing financial stuff—like lending, borrowing, or trading—without banks or middlemen. It’s not magic. It’s code running on blockchains, mostly Ethereum and its layer-2 cousins, that lets you interact directly with other people’s money—or your own—through apps called protocols.

Think of it like replacing your bank branch with a smartphone app that never sleeps, never charges hidden fees, and doesn’t need your ID. You can earn interest just by locking up your crypto. You can trade tokens without signing up for an exchange. You can even automate your trading strategy using tools like TokenSets, a fee-free platform that runs crypto trading strategies automatically. Or trade directly on a layer-2 network like Base DEX, a decentralized exchange built on Coinbase’s Base blockchain. These aren’t side projects—they’re real, live systems people use every day to move money, hedge risk, or just try something new.

DeFi isn’t about getting rich quick. It’s about control. If you’ve ever felt locked out of traditional finance—because you’re in a country with shaky banks, or because you don’t want to give up your data to a big company—DeFi gives you a way in. It’s not perfect. Bugs happen. Scams exist. But the core idea? It’s powerful. You own your assets. You decide when to trade. You don’t need permission.

Below, you’ll find real-world examples of DeFi in action: platforms that automate your trades, exchanges built for speed and low cost, and tokens that power these systems. Some are serious tools. Others are wild experiments. But they all show how DeFi is changing what’s possible with money—no bank account needed.