Decentralized finance (or DeFi) is changing the way individuals handle money. Contrary to conventional banks, DeFi enables people to lend, borrow, trade and invest through blockchain technology and smart contracts. It eliminates authority at the center and puts more power in the hands of people. Although DeFi holds a bright future, there are many risks and challenges involved. Anyone involved in this ecosystem must be knowledgeable about the DeFi governance and its risks.
The primary promise of DeFi is transparency, efficiency and decentralization. The user will be able to make selections, receive interest, and be a part of the governance process without the use of banks. These advantages have their costs, however. To avoid losses and fraud, investors have to keep up to date and have to work on the management of investing assets.
