DeFi(Decentralized Finance) is a financial system on the blockchain that includes various activities such as borrowing, lending, staking, yield farming, token swapping, and flash loans. Popular DeFi services include Aave, Sushi, 0x, Yearn Finance, Zerion, dYdX, Maker, Deversifi, Oasis, Kyber, and Bamboo Relay.
The type of DeFi service you use will vary depending on your needs. For swapping tokens and contributing liquidity, use Uniswap or Sushi. For lending funds, keep funds in services like Compound or Aave. For managing multiple DeFi activities, use Zapper. To use any DeFi service on Ethereum, you need an Ethereum wallet such as Metamask, etc.
DeFi advocates cite three key benefits:
1. Decentralization - The means greater trust in the system's objectivity and immutability.
2. Automation - The increases efficiency.
3. Higher returns - The come from protocol tokenomics and the lack of a bank with overhead in the middle.