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DeFi: What you need to know about decentralized finance

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Bitcoin on a desk.

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Imagine what it would be like if you didn’t have to wait days for your paycheck to be processed by the bank. Or getting a loan without having to go through a bank loan officer.

That’s finance, decentralized. Fans of decentralized finance believe DeFi has the potential to make our current financial system more efficient, accessible and affordable by getting rid of intermediaries like banks, brokers and exchanges.

“The goal of DeFi is to make financial services more democratic,” says Linda Jeng, a visiting scholar of financial technology and adjunct professor at Georgetown Law. “That means more open access. Anyone should be able to use it. It’s about empowering the customer. So users get to decide the rules of the game.”

There’s a lot of hype around DeFi. It’s gone from $1 billion industry in 2018 to $90 billion in 2021. But there’s not a lot of regulation.

On the show today, we’ll talk about the risks and rewards of decentralized finance.

In the newsfix, we’ll stay on the DeFi theme and discuss a new Securities and Exchange Commission report on the GameStop brouhaha and explain why coal-fired power is on the rise in America. Plus, a “Make Me Smart” listener weighs in on the difference between sailing and yachting.

When you’re done listening, tell your Echo device to “make me smart” for our daily explainers. This week we’ll explain the business behind Halloween candy and haunted houses. Also, don’t forget to subscribe to our newsletter! You can find the latest issue here.

Here’s everything we talked about today: 

Read the transcript here.

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