A movement encouraging alternatives to traditional, centralized forms of financial services.
The DeFi movement is based on the idea that the financial system should not be controlled by monopolistic third-party providers of this sort, and that it should instead be decentralized. Some have political or philosophical reasons to hold this premise, while others simply believe that it will increase the efficiency and speed of transactions.
Many commentators believe that DeFi heralds the future of financial services, and large bets are being made on DeFi start-ups. However, there have been several high-profile failures amongst DeFi players, and the field remains very much in its infancy.
DeFi should not be confused with embedded finance (sometimes known as invisible finance,) which is a movement within traditional financial services and fintech that aims to broaden access to banking and payments technology.