In very simple terms, this is a context of financial applications based on blockchain technology that operates without the recommendation or third-party involvement of the central administration. It creates decentralized applications using a P2P(Peer-to-peer) system that empowers them to interface and manipulate their assets regardless of their location and status. It seeks to provide a transparent, open-source, and unlicensed financial aid system.
Smart contracts are based on decentralized Finance(DeFi) because they are self-operating and do not require intermediary supervision. Since the introduction of the concept of Defi, the most notable area of Defi applications has been Blockchain.