DeFi is an umbrella term for open-source software protocols that run on the internet that allow people to conduct financial activities in a new way. DeFi is about creating universally accessible financial infrastructure that anyone with an internet connection can access and use, and that’s something anyone can get on board with who values things like accessibility, independence, self-custody, or autonomy in their financial lives.

DeFi is software that can increase economic access for everyone by making the digital economy fairer, more transparent and more equitable. Increased Transparency: DeFi protocols increase operational transparency about the mechanics of market infrastructures and associated fees by using open-source software, which makes transactions more transparent and auditable by using blockchain-based records. Equitable Market Access: DeFi protocols are open and available to anyone in the world with an internet connection, giving them the potential to significantly expand access to financial services.[1] That access empowers more people to use financial services without having to go through intermediaries that may prevent sectors of the market from participation, either through unavailability, absolute prohibitions, excessive pricing, or unfair or discriminatory treatment. 24/7/365 Liquidity: Users can access and use markets at all times of the day without the need for closing markets at the end of each day. Among other things, this eliminates the risk of capital dislocations due to illiquid aftermarket trading in traditional systems. Lower Costs and Faster Settlement: DeFi protocols reduce friction and transaction costs for the creation, distribution, trading, and settlement of financial assets with faster settlement times for users. Improved Security: Transactions using DeFi protocols are recorded on blockchains, the records of which cannot be manipulated or amended, offering greater security to users. Greater Control: The absence of intermediaries in DeFi protocols provides individuals with the ability to custody their own assets, giving them greater control and certainty. Additionally, in some instances, market participants can directly develop community-governance standards. Greater Uptime: Permissionless blockchains are operationally resilient (the Ethereum blockchain has never gone down), whereas traditional market infrastructures have had major technology failures, resulting in downtime for securities markets. Elimination of Broker Risk: DeFi protocols have no employees to supervise, no financial risk for users from broker activity or custody, and no interaction between a broker and customers that could result in unlawful sales practices or other unfair and discriminatory dealing. Elimination of Anti-Competitiveness: Users can easily move their self-custodied cryptocurrencies from one protocol to another at any time without significant friction, unlike the “siloed” experience in traditional financial services.

To a large extent, the existing financial regulatory system applies centralized intermediaries. Before the development of cryptocurrencies and DeFi protocols, digital financial activities required the use of intermediating financial institutions. DeFi protocols allow people to engage in economic activities using software instead of financial institutions, similar to how people can use bitcoin’s software to conduct peer-to-peer payments. But “what they are” — open-source software programs that run on the internet — createst insuperable challenges for a regulatory framework predicted on the necessity of intermediating businesses in financial activities. DeFi developers and market participants share those objectives: to protect consumers, prevent illicit financial activity, and limit systemic risks. The problem is that it’s impossible to accomplish those goals using the old toolbox. “No regulation can be static in a dynamic society.” Our approach to accomplishing long-standing policy objectives has always needed to adapt to technological innovation. DeFi is no different. DeFi is something genuinely unprecedented, and we need to develop a new toolbox that can allow for societies to enjoy the benefits of DeFi while simultaneously equipped to accomplish core policy objectives.

DeFi is a truly decentralized alternative to Centralized Finance (CeFi). CeFi relies on trusted intermediaries to effectuate activities on behalf of customers, custody assets and control permissions or access. By contrast, DeFi runs on permissionless protocols that lack centralized intermediation entirely.

For any conflicts of interests that may arise over normal course of business, individual members of the DeFi Education Fund will recuse themself from said activity.

As a 501(c)(4) nonprofit organization, we do not have any members.

We were allocated an initial one million UNI back in August 2021. We also engage in fundraising activities to further support our mission.

For general inquiries, please reach out to contact@defieducationfund.org For media-related inquiries, please reach out to max@defieducationfund.org For grant-related inquiries, please reach out to grants@defieducationfund.org