DeFi Basics: Lending, DEXs, and Stablecoins

Decentralized Finance replaces intermediaries with smart contracts. Automated Market Makers (AMMs) use liquidity pools and formulas to let users swap tokens directly from their wallets. Lending protocols match borrowers to lenders via smart contracts that enforce collateralization rules.

Risks

Smart contract bugs, oracle failures, governance attacks, and liquidity crises happen. Read documentation, limit leverage, diversify across protocols, and prefer protocols with high audit/verification standards.