# DeFi - Beginners Guide

Welcome all newcomers to the amazing world of Decentralized Finance!&#x20;

The Autofarm team is here to help you through your first experience in the DeFi world with these guides that recompile many of the DeFi basics. We have condensed the more crucial aspects about DeFi and provide the used sources and additional links and videos at the end of each section. So come join us in the DeFi knowledge revolution!

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Please note, the guides and any other documentation in this section are **not financial advice**. Please always double-check sources on keep educating yourself and do your own research (DYOR).
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### **What is DeFi?**

DeFi is short for Decentralized Finance. It's the opposite of CeFi (Centralized finance). DeFi is characterized by including digital assets, protocols, smart contracts and blockchain-built dApps (Decentralized Applications).&#x20;

The central point of DeFi is that it does not depend on a central actor for its operation but multiple decentralized actors. Everything is done through smart contracts, which use code to perform previously stipulated actions. These smart contracts are open source and can be found on the corresponding block explorer (e.g. for Binance Smart Chain (BSC) network: [https://www.bscscan.com](https://www.bscscan.com)) Developers around the world can collaborate to create new products that lead to faster innovation and a secure network. Anyone can store, trade and invest their blockchain assets securely and get much higher performance than the traditional financial system. Since there are no intermediaries who manage their assets, the same person has full control over their investments, this implies a great degree of freedom but in turn a great individual responsibility for the management of funds. But, DeFi’s motto is DYOR (Do Your Own Research) so do hold on to that and keep educating yourself.

The Ethereum platform is the main option for the DeFi application, but others work similarly and have been in explosive growth, such as Binance Smart Chain (BSC), Huobi ECO chain (HECO), or some (like Cardano) which are still in development.\


### **What are the benefits of DeFi?**

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**Open access:** You don’t need to apply for anything or “open” an account. You just get access by creating a wallet.
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**Pseudonymous:** There is no KYC which means you don’t need to provide your name, email address, or any other personal information.
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**Flexible:** You can move your assets anywhere at any time, without asking for permission, waiting for long transfers to finish, and paying expensive fees.
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**Fast:** Interest Rates and rewards often updated rapidly (sometimes as quick as every 5-15 seconds), and can be (and most are) significantly higher than traditional Wall Street.
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**Transparent:** Everyone involved can see the full set of transactions on the corresponding block explorer. Private corporations and other financial systems rarely grant that kind of transparency.&#x20;
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**Money Legos:** DeFi services work in conjunction with one another, making it possible to mix and match different services to create new and exciting innovative solutions and new opportunities. This mechanism kind of resembles how you can use different LEGO blocks and get creative with whatever it is you want to build. Hence the term ‘money legos’ has been coined to refer to DeFi services.
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### **Useful documentation**

[https://www.ledger.com/academy/what-is-defi](https://www.ledger.com/academy/what-is-defi)\
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[https://www.coinbase.com/learn/crypto-basics/what-is-defi](https://www.coinbase.com/learn/crypto-basics/what-is-defi)

[https://99bitcoins.com/what-is-defi/](https://99bitcoins.com/what-is-defi/)

### **Videos about DeFi**

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Video: DEFI - The Future Of Finance Explained
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Video: What is DEFI? Decentralized Finance Explained (Ethereum, MakerDAO, Compound, Uniswap, Kyber)
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Video: Binance Smart Chain And CeDeFi Explained
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Video: What is DeFi? A Beginner’s Guide to Decentralized Finance
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