# What is DeFi? Decentralized finance (DeFi) is an emerging model for organizing and enabling cryptocurrency-based transactions, exchanges and financial services. DeFi's core premise is that there is no centralized authority to dictate or control operations. It's a different approach than the traditional models of finance for [fiat currency](https://www.techtarget.com/whatis/definition/fiat-money-fiat-currency) or centralized finance (CeFi) within the [cryptocurrency](https://www.techtarget.com/whatis/definition/cryptocurrency) markets. With centralized models, there is a core foundational authority that can influence and control the flow of transactions. The central authority often is also responsible for custody of assets. With DeFi, there is no central authority. Instead, authority is distributed in a decentralized approach that is intended to provide more power and control to individuals. In the DeFi model, all transactions for buying, selling, loans and payments with cryptocurrency can occur without a central authority in a peer-to-peer (P2P) approach. Custody of assets is a fundamental component of any financial model. In the DeFi approach, individual traders have control over the private cryptographic encryption keys, which enable custody of cryptocurrency assets. Financial transactions within the DeFi model are enabled with [smart contracts](https://www.techtarget.com/searchcio/definition/smart-contract) that are often supported on Ethereum-based [blockchains](https://www.techtarget.com/searchcio/definition/blockchain). In a nutshell, banks are a centralized authorities. DeFi platforms are decentralized and trustless. Transactions are executed through [smart contracts](https://www.techtarget.com/searchcio/definition/smart-contract), eliminating the need for intermediaries. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.gyro.win/beginners-guide/what-is-defi.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.