DeFi (Decentralized Finance)

Decentralized Finance (DeFi) is a category of financial services — lending, trading, derivatives, yield products — built on smart contracts that run on public blockchains. The signature DeFi platforms include Aave, Compound, Uniswap, and MakerDAO.

DeFi's advantages: 24/7 operation, transparent code, no KYC on many protocols, instant settlement. Trade-offs: smart-contract risk, oracle manipulation, no consumer protection, and increasing U.S. regulatory restrictions for retail users.

Why it matters for Milo customers

Milo is CeFi (centralized finance) — a regulated, licensed U.S. lender. The contrast with DeFi matters: Milo borrowers get legal contracts, dispute resolution, fixed-at-funding margin thresholds, and human underwriting. DeFi borrowers get speed and openness but accept smart-contract and oracle risks that CeFi structurally avoids.

Related terms

Decentralized Exchange (DEX)Smart ContractOracle (Crypto)Non-Bank Lender
Deed of TrustDepreciation

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