What is DeFi?
DeFi (Decentralized Finance) refers to financial services built on blockchain technology that don't require banks or financial institutions as intermediaries.
DeFi vs Traditional Finance
| Aspect | Traditional Finance | DeFi |
|---|---|---|
| Intermediary | Banks required | Smart contracts |
| Hours | Business hours | 24/7 |
| Approval | KYC required | Permissionless |
| Transparency | Opaque | Fully transparent |
| Control | Bank controls | You control |
Tip
DeFi's core philosophy is "removing the middleman," allowing anyone to participate in financial services equally.
Main DeFi Applications
1. Decentralized Exchanges (DEX)
Platforms like Uniswap and PancakeSwap let you trade tokens without registration.
Pros:
- No KYC required
- Control your own assets
- Trade newly listed tokens
Cons:
- Gas fees required
- Higher learning curve
- Risk of fake tokens
2. Lending Protocols
Platforms like Aave and Compound let you lend assets to earn interest or borrow against collateral.
Deposit Rates:
- Stablecoins typically 2-8% APY
- Much higher than bank savings
Borrowing Uses:
- Leverage trading
- Avoid selling held assets
Warning
Lending has liquidation risk! If collateral value drops, you may be liquidated.
3. Liquidity Mining
Provide funds to liquidity pools to earn trading fees and token rewards.
Danger
Liquidity mining has "impermanent loss" risk! Token price changes can cause losses.
4. Staking
Stake tokens to earn rewards while supporting blockchain network operations.
- ETH staking yields about 4-5% APY
- Other PoS tokens have varying yields
Getting Started with DeFi
Step 1: Set Up a Wallet
You need a DeFi-compatible wallet:
- MetaMask - Most popular Ethereum wallet
- Trust Wallet - Multi-chain support
- OKX Wallet - Web3 integration
Step 2: Get Cryptocurrency
Buy ETH or other tokens from an exchange and transfer to your wallet.
| Exchange | Features | Discount | |
|---|---|---|---|
| Binance | World's largest exchange、Most trading pairs | 20% fee discount | |
| OKX | Strong derivatives、Web3 wallet integration | 20% fee discount | |
| Bybit | Best for futures、Copy trading | 20% fee discount | |
| Pionex | Free trading bots、Grid trading | Free trading bots |
Step 3: Prepare Gas Fees
All Ethereum operations require ETH for gas. Make sure you have enough ETH.
Step 4: Connect to DApp
- Go to a DeFi platform (e.g., Uniswap)
- Click "Connect Wallet"
- Select your wallet
- Confirm connection
Step 5: Start Using
Now you can:
- Swap tokens on DEXs
- Deposit stablecoins to earn interest
- Participate in liquidity mining
Security Rules
Danger
DeFi scams are common. Please pay attention to the following!
Do:
- Use official links only - Find official sites through CoinGecko or DefiLlama
- Verify contract addresses - Confirm it's the correct token
- Test with small amounts - Try first transactions with minimal funds
- Revoke approvals regularly - Use Revoke.cash to clean unnecessary approvals
Avoid:
- Unknown links - Could be phishing sites
- Fake airdrops - Most "connect wallet for airdrop" are scams
- Ultra-high returns - Projects with 1000%+ APY are extremely risky
- Brand new projects - Wait for community verification
Recommended DeFi Platforms
| Platform | Type | Chain | Description |
|---|---|---|---|
| Uniswap | DEX | Ethereum | Largest DEX |
| Aave | Lending | Multi-chain | Blue-chip lending protocol |
| Lido | Staking | Ethereum | ETH liquid staking |
| Curve | DEX | Multi-chain | Best for stablecoin swaps |
Summary
DeFi offers freedom and opportunities not available in traditional finance, but also comes with risks. Beginners should:
- Understand basic concepts first
- Start with small amounts
- Focus on security, avoid scams
- Never invest more than you can afford to lose
Ready to enter the DeFi world? Start by registering on an exchange: