# What is DeFi? DeFi, or Decentralized Finance, refers to a global, peer-to-peer network that is built to replace the traditional banking system. Using blockchain technology, consumers can store their own assets and freely transact directly with other users without relying on traditional intermediaries such as banks, brokers, exchanges and insurance companies. This eliminates many of the costs, restrictions and regulations associated with our legacy financial system.

Proponents assert that DeFi is superior to traditional finance because it retains all the benefits of conventional banking while being cheaper, faster and much more accessible and transparent. Critics argue that it represents an existential threat to the global financial system, a serious danger to the community and must be regulated at all costs. Whatever side of the argument one falls on, DeFi’s popularity is undeniable. The market has grown 10x in 2021 alone to a current value of \~$200B in deposits.

What is driving this popularity? Let’s dig a little deeper… --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://www.digitalnations.xyz/web3-overview/the-web3-ecosystem/defi/what-is-defi.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.