DeFi vs. Web3: Key differences explained
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Loading... - Marija Vukovic
- 14 Feb 2023
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Is DeFi a part of Web3?
DeFi is an emerging financial system within Web3 that provides new forms of value and utility that aren’t present in conventional financial systems.
Web3 is a new paradigm for the internet. It’s based on using blockchain technology to make the internet fairer and more decentralized by giving users control of their own data, identity and money.
Decentralized finance (DeFi) is an emerging financial system within Web3 that provides new forms of value and utility that aren’t present in conventional financial systems. The main difference between Web3 and DeFi is that DeFi is built on top of existing smart contract platforms, such as Ethereum, while Web3 is built on the internet itself.
Essentially, DeFi and the decentralized internet (Web3) are two separate but related areas of technological innovation. They both involve creating an alternative version of the internet or finance that is more decentralized and securer than their centralized counterparts.
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What is Web3, and how does it work?
The way people engage with technology, particularly in finance, has changed significantly along with the development of the internet over time. The division of these developments is known as Web1, Web2 and Web3.
Web1 is essentially the first iteration of the internet from the 1990s to the 2000s. Websites mainly consisted of static HTML pages and were not interactive. There was no infrastructure set up to accommodate financial transactions.
Web2 is when the internet started to become more interactive. It’s an era characterized by mobile applications, social media, and online content consumption. Fiat transactions over the internet were made possible. Read More…
