Decentralized Finance or DeFi, is a new financial system that provides an alternative to traditional finance, or TradFi. DeFi was first put into practice with Bitcoin, which allowed for the decentralized, independent, and private custody of wealth and peer-to-peer transfer of funds without the use of a third party. DeFi was popularized and further expanded on the Ethereum blockchain through the use of smart contracts. Popular DeFi products include decentralized exchanges and Automated Market Maker.