Current state of DeFi in 2021: Part 1

DeFi is an open and multi-faceted financial system facilitated by smart contracts and blockchain oracles, acting as an alternative to the traditional opaque system run by decades-old infrastructure and processes. It provides users permissionless and borderless access to various financial instruments without relinquishing control over assets to intermediaries such as brokerages or banks.

In this first part of a two-part series, we summarize the macro trend in DeFi and look into the evolution of major DeFi sectors, such as lending, decentralized exchanges (DEXes), and derivatives.