# Introduction to DeFi

Learn the core concepts behind decentralized finance and protocols such as Ramses.

Source: https://www.ramses.xyz/docs/intro-to-defi

## What Is DeFi?

As you explore Web3, you will encounter many new terms. DeFi is one of the most important concepts to understand.

**DeFi, short for decentralized finance,** uses blockchains and smart contracts to provide financial services without relying solely on centralized intermediaries. These services can include exchanges, lending markets, asset custody tools, and other programmable financial applications.

Developers and communities can deploy and govern DeFi applications. Compared with traditional finance, DeFi is designed to be **permissionless**, **transparent**, and less dependent on intermediaries, but it introduces smart-contract, market, operational, and self-custody risks.

![Comparison of traditional and decentralized finance](https://www.ramses.xyz/docs-assets/tradfi.png)