We have already seen a definition of what DeFi is. It is a new system of finance facilitated by decentralized applications.
In essence, DeFi is about removing the concentration of authority from centralized institutions like banks. This makes the entire system less prone to manipulations, more accessible to the general public, and above everything, removes the cost associated with intermediaries and third-party interventions that are designed to bring interest.
This brings the next major question of how trust can be enforced in such a system. The enforcement of trust is adequately taken care of by a small program that is designed to execute by itself and resides right within the blockchain. These programs are called smart contracts.
