# My DeFi Story By [Lanafunmi](https://paragraph.com/@lanafunmi) · 2022-08-29 --- Crypto this, bitcoin that. Something dipping, something rising. Of course, we hear about these things all the time and we all know the basics of these things but there’s more to learn. I finally made up my mind to start learning DeFi, been postponing it for quite a while now. Now you all are going to go on this beautiful adventure with me, welcome to my DeFi Story. DeFi is the finance system of [web3](https://lanaoflagos.hashnode.dev/what-is-web3). INTRODUCTION ------------ DeFi stands for Decentralised Finance, what exactly a Decentralised Finance? I make sure to define terms in my language when learning, DeFi according to Lanafunmi in the year of our Lord Two Thousand and Twenty Two, is simply a mode of exchanging trade without a central government being in charge. It is the mode of exchange in Web 3.0 Is DeFi only about crypto? I’m not sure but I think so cause you trade NFTs with crypto and almost everything in the Blockchainverse trickles down to it. _Shall we begin in proper_? A little statistics: More than half of the 1.7 billion people without a bank account as of 2017 are believed to be residents of developing countries, according to the World Bank. Most of them come from low-income families, and among the main causes of their lack of bank accounts are trust concerns, geographic limitations, and poverty. The World Bank does note that two-thirds of the 1.7 billion people who lack access to banking do, however, have access to mobile phones. DeFi is here to bridge that trust gap. subscribe:// What exactly is DeFi? Decentralized Finance is the movement that allows users to utilize financial services such as borrowing, lending, and trading without the need to rely on centralized entities. DeFi is not a single product or company, but a range of financial services which emulates traditional financial industries, including banking, insurance, bonds, money markets, and more. These financial services are delivered through Decentralized Applications (Dapps), the vast majority of which are built on the Ethereum platform. DeFi Dapps gives users the option to use these various services to meet their financial objectives. ### What is Ethereum? Ethereum is the backbone of the blockchain. It is a global, open-source platform for decentralized applications. What else can Ethereum be used for? Besides creating Dapps, Ethereum can also be used for two other functions—creating Decentralized Autonomous Organizations (DAO) or issuing other cryptocurrencies. In later issues, we’d talk more about Ethereum. These are the basics of DeFi, let’s look at the various categories of it. * Stable coins * Lending and borrowing * Exchanges * Derivatives * Fund management * Lottery * Payments * Insurance * Governance ### Wallets in DeFi Your wallet is your identity in web3 as a whole. Wallets allow you to receive, store and send cryptocurrencies. There are two types of wallets, which are custodial and non-custodial. Custodial wallets, your private keys, and other details are stored with a third party, the third party has full control over your funds and you only have to permit to send or receive payments.  Non-custodial wallets, are a type of wallet that lets you be your bank. Users have full control over their funds and the private key. We would talk more about this in the coming issues. So much to learn, so many complexities. Step by step, we would cover it all. Till we meet next time, this is the first highlight of my DeFi journey. --- *Originally published on [Lanafunmi](https://paragraph.com/@lanafunmi/my-defi-story)*