Financial services built as open software on public blockchains. Per ethereum.org's framing, DeFi is open financial service infrastructure. You keep control of your assets. Collateralized borrowing, token exchange, and flash loans are the worked examples. The services run on protocols, not companies, though companies build and maintain many protocols.

What is a DEX vs an exchange?

A centralized exchange holds your assets and runs the order book. You depend on the operator. A decentralized exchange is a smart contract you trade against directly. Per ethereum.org, you never give up control of your assets. The market runs 24 hours a day, 365 days a year, because no opening hours exist for a contract.

Total value locked, the sum of asset value deposited in a protocol's contracts to earn rewards or interest, per DefiLlama's definition. It resembles assets under management but counts deposited collateral. By that provider's methodology it excludes staking and borrowed funds. Every TVL figure on this site carries its provider and date.

Are stablecoin yield products a trap, and what red flags?

This site flags mechanics, not products. The structural facts: yield on a lending protocol comes from borrowers paying interest, so a stated rate reflects demand for leverage. Anything promising a fixed high return with no disclosed source breaks the mechanism described on this page. The regulation pages cover what investor protections do and do not apply.

DeFi: Decentralized Finance on Public Blockchains

What this page is

This page explains decentralized finance from protocol documentation and one named data provider. It was rebuilt in 2026 from a stub. It defines the model, walks the two core mechanisms, exchange and lending, and states the size of the field with its date. It recommends nothing.

The definition

ethereum.org frames the field plainly. DeFi is open financial services built on public blockchains, with collateralized borrowing, token exchange, and flash loans among its use cases ^[3]. The defining property is control. You never give up control of your assets, in that page’s words, and the services run 24 hours a day, 365 days a year ^[3].

Companies still exist in this field. They build and maintain protocols. The difference from conventional finance is structural. The service runs as a smart contract on a public chain, and anyone can read its code before using it.

The page that follows keeps a discipline worth naming up front. It names protocols as the owners of mechanisms, Uniswap for the market maker, Aave for lending on the finance page, and stops there. A mechanism’s existence is a fact. A protocol’s suitability for any reader is not. No sentence below crosses that line. The page was rebuilt in 2026 from a video-led stub that held no definitions. Every number here carries the source and date that the stub never did.

Trading without an order book

The core DeFi invention is the automated market maker. Uniswap’s own glossary defines it. A smart contract on Ethereum that holds liquidity reserves. Users trade against those reserves at prices set by a fixed formula ^[2].

The formula is the famous one. The constant product rule, x times y equals k, prices every trade against the pool’s two reserves ^[1]. Larger trades relative to pool depth move the price more. The docs call this cost price impact ^[1]. Anyone can supply the reserves. A liquidity pool holds two token reserves. Suppliers receive position tokens in return. The tokens differ by version: fungible tokens in v2, non-fungible positions in v3, a share-based manager in v4 ^[1].

The versions show the machinery evolving. v3 added concentrated liquidity, where suppliers pick a price range. v4 added singleton pools, flash accounting, and hooks ^[1]. Version four went live on Ethereum mainnet on 31 January 2025 per secondary reporting, with earlier versions still deployed ^[8].

Supplying liquidity has a named cost. Impermanent loss, per the glossary, is the opportunity cost liquidity providers bear when token prices change relative to simply holding ^[2]. The mechanism pays suppliers fees for bearing it.

The size of the field, one provider’s count

Total value locked across DeFi was 88,701,621,932 dollars, about 88.70 billion, on 11 September 2026, per DefiLlama’s historical series ^[4]. The same provider tracked 8,235 protocols that day. Of those, 2,095 sat in its decentralized exchange category ^[5]. Ethereum carried the largest chain share, about 50.54 billion dollars of the total ^[6].

The market maker above shows how value spreads across one protocol’s versions. That same day, the provider carried Uniswap V3 at about 1.57 billion dollars across 46 chains, V4 at about 1.10 billion, and V2 at about 987 million across 15 chains ^[5]. Three versions, one protocol, three numbers, one date. The figures are scale examples from one provider’s pull, not a ranking. Older versions holding billions is the normal state of this field, not an anomaly.

What TVL counts matters as much as the number. DefiLlama defines it as the value of assets deposited to a protocol to earn rewards or interest, similar to assets under management ^[7]. Its methodology excludes native staking, borrowed funds, and vesting tokens by default, and it prices assets through a market data API ^[7]. TVL measures deposits. It is not a reserve figure, not a market cap, and not a solvency claim, and this site never treats it as one.

How the figures were checked

One rule governed the numbers. A single figure for a metric gets a single source, quoted identically everywhere it appears. The 88.70 billion total is the historical series pull from 11 September 2026, and the finance page quotes the same row from the same source ^[4].

The pull was cross-checked against an earlier same-day pull from the glossary research on this site. That one read 88,705,166,388 dollars. The two differ in the fifth digit, intraday movement in an hourly-updated series. Their agreement in every leading digit is the consistency check. Provider counts of this kind move constantly. The date rides with every figure. No figure is stated as a standing fact.

Where this page sits

The finance page covers the lending half of DeFi, with the same TVL source and date. The stablecoin introduction covers the asset class most DeFi activity denominated in. The Ethereum page covers the chain carrying the largest share. The cryptocurrency hub frames the cluster. Every figure above carries its provider and date.