Decentralized Finance Tokens (DeFi tokens) are a type of cryptocurrency that is used within decentralized finance protocols or platforms. These tokens are designed to enable various financial activities such as lending, borrowing, trading, and investing without the need for traditional financial intermediaries like banks or brokers.
DeFi tokens operate on blockchain networks, such as Ethereum, and are governed by smart contracts. These smart contracts are self-executing agreements that automatically enforce the terms of a transaction, removing the need for a central authority to oversee the process.
One of the key characteristics of DeFi tokens is their decentralization, which means that the control and ownership of these tokens are distributed across a network of nodes rather than being concentrated in the hands of a single entity. This decentralized structure helps to increase transparency, security, and accessibility for users participating in the DeFi ecosystem.
Overall, DeFi tokens play a crucial role in enabling users to access a wide range of financial services in a more efficient, cost-effective, and inclusive manner compared to traditional financial systems.
