decentralized finance as you all know bitcoin isn't controlled y any bank or government.so I am explaining here that any cash isn't remain on position its have to transfer from one place to another .Actually bitcoin is decentralized money .There are many ways and financial system services for transferring money.
Money transfers in one possible services.
additional services include insurance saving plans bank transaction etc. etc.
All services depend on , rely on some authorities in currency language that authority called central authority. but DeFi is one type of financial service with no specific central authority.
there are some components which are necessary for DeFi.
decentralized infrasture , Ethereum is specific platform for decentralized programs. Every financial system needs money for working. They made small contracts with other companies for their work.
Decentralized financial system must have stability.
DAI stable coin pegged to USD ,overcollateralized ,backed by cryptocurrency collateral and you should focus on that $1ETH collateral equal to 0.006$,DAI stability depend on ETH tokens 1$ETH equals to 20tokens.
There are few types of many markets connects bowers with money lenders, Earn interest on cryptocurrency and automounts terms of loan. some benefits of DeFi are here free for all ,transparency, interoperability and decentralization along with these advantages there are some drawbacks some services are partially centralized ,highly research is required for investing in any service its the infancy stage still and we may use small amounts of money.
