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DeFi stands for Decentralized Finance
It's an ecosystem of apps that do the same thing as a bank but without middlemen.
In this article, I break down the key terms so you can grasp DeFi without getting lost.
Term 1 Liquidity
Liquidity is the ease with which you can buy or sell a token without causing significant price movement.
If a token has high liquidity, you can dump a lot without tanking the price.
If it has low liquidity, a small sell-off can crash the price hard.
In DeFi, liquidity is provided by users, not banks.