Decentralized finance (DeFi) uses smart contracts on permissionless blockchains to provide financial services like lending, borrowing, trading, and earning interest—all without traditional intermediaries such as banks or brokerages. While these platforms can offer high interest rates, they carry significant risks, including coding errors, hacks, and varying degrees of decentralization that can open the door to manipulation or fraud. A core principle is global accessibility, as these "dApps" operate on public blockchains without Know Your Customer (KYC) or Anti-Money Laundering (AML) requirements, and their composable nature allows developers to combine protocols like "money Legos" to build new interoperable financial products. The sector gained momentum after Ethereum popularized smart contracts in 2017, with MakerDAO (later rebranded as Sky in September 2024, renaming its stablecoin DAI to USDS) emerging as a prominent lending platform. In June 2020, Compound Finance introduced token rewards (COMP), sparking the "yield farming" craze, and by September 2020, Bloomberg reported that DeFi collateral levels had reached $9 billion, driving two-thirds of the cryptocurrency market's price changes.