When the first cryptocurrency, Bitcoin, was proposed in 2008, the goal was simple: to create a digital currency free from banks and governments. Over time, that idea evolved into something much bigger: “decentralized finance,” or “DeFi.”
With decentralized finance, people trade, borrow and earn interest on crypto assets without relying on traditional intermediaries. DeFi services run on blockchains, which are essentially digital ledgers, and use “smart contracts” − self-executing code that automates financial transactions. Tens of billions of dollars have poured into the DeFi market.
But with innovation comes risks. The lack of centralized oversight has made crypto, including decentralized finance, a prime target for hackers and scammers. In 2024 alone, people lost nearly US$1.5 billion due to security exploits and fraud. And unlike traditional finance, there’s usually no way to recover stolen crypto.
