<center>![image_uqZcxy4i_1687164920619_raw-lions on top of cryptocurrency and decentralized finance world.jpg](https://files.peakd.com/file/peakd-hive/rzc24-nftbbg/AK7xKLqJCXgN3hdKZwBBD1GHtdUYrT7JK6xNYqxP5VqMJ8FL9vztbyQHWbCb7gw.jpg)</center>

<center>[Source](https://openart.ai/@somali_corrupt_24)</center>

I have been looking for an appropriate picture to conclude my series on ***The Way to Financial Freedom.*** Though I am grateful for the free photos provided by pexels.com, the choices are limited. It is not easy to find an exact image that describes what is in my mind. More appropriate photos are not free.

With the advent of artificial intelligence in the field of art, one can just simply type a prompt, and in just a matter of seconds, a new image will be generated.

Looking for a picture to describe [“decentralized finance”](https://leofinance.io/posts/@leoglossary/leoglossary-decentralized-finance-defi) on pexels.com is frustrating for most of the images there are familiar and boring. And so, I tried openart.ai and input “lions on top of [cryptocurrency ](https://leofinance.io/posts/@leoglossary/cryptocurrency)and decentralized finance world” and the above picture is what I got. 

Where can you find a lion doing crypto and Defi? Only here on LeoFinance. 🤣

Kidding aside, let me now proceed to my last article about financial freedom and there is no better way to conclude the subject except by having an overview of the character of Decentralized Finance or DeFi.  

# An Overview of Decentralized Finance

I recognize that most of the materials that I will touch on in this post are already old for many veterans in the crypto space. However, the context of this lecture is aimed at those who know almost nothing about [financial technology](https://leofinance.io/posts/@leoglossary/leoglossary-fintech) such as blockchain, cryptocurrency, and Decentralized Finance.

Let me start by asking the question what is Decentralized Finance? 

Again, one can just provide links to numerous financial technology websites out there. However, I have a problem appreciating the typical response due to my unfamiliarity with Ethereum, considered to be the primary blockchain where financial applications are built.  Removing the reference to [Ethereum,](https://leofinance.io/posts/@crypto-guides/what-is-ethereum-eth) I find this response from chat.openai.com is sufficient enough to capture the character of DeFi:

> Decentralized Finance (DeFi) is a collection of financial applications and systems built on blockchain networks. . . It aims to create an open and permissionless financial ecosystem without intermediaries. DeFi utilizes smart contracts to automate and enforce financial agreements. Key characteristics of DeFi include accessibility, transparency, security, interoperability, and innovative incentives like yield farming and liquidity mining. DeFi has the potential to transform traditional finance by promoting inclusivity, efficiency, and reduced reliance on centralized institutions. However, it is a rapidly evolving space with associated risks and challenges.

If I am going to expound on the above summary, that would require a longer piece, which I can’t cover in this concluding article. It is enough to know that DeFi is a subset of financial technology that combines various financial applications built on the blockchain. I think that’s the shortest way to describe it. 

If we want to add more, then we can mention the absence of permission and middlemen, [smart contracts,](https://leofinance.io/posts/@leoglossary/leoglossary-smart-contract) and its key features like “accessibility, [transparency](https://leofinance.io/posts/@leoglossary/leoglossary-transparency), security, and interoperability.” “Yield farming” and “liquidity mining” too, need to be mentioned but understanding their intricacies requires an extended elaboration. What I like most in the above definition is the reality of genuine financial inclusivity and if possible, the disruption of centralized entities.    

The character of Defi to revolutionize traditional finance is not at all farfetched. DeFi is also described as a “movement,” a socio-economic one. As such, the role of a community is crucial to the success of such a movement. And this is what I see some people here on Hive are striving to achieve. We see serious problems in our existing [monetary system](https://leofinance.io/posts/@leoglossary/leoglossary-monetary-system) and we want reform. Such a desire for change evolves into common goals that somehow motivate those who understood that vision of digital freedom. 

I am confident that DeFi as a movement will certainly succeed and will play a vital role in shaping the global economy in the years to come. How I hope that Hivers, lions, and other tribes built on Hive will possess a long-term mindset requires for this kind of real inclusive society to materialize.      
    
# DeFi as Finance 3.0

In May of 2021, I stumbled upon this financial technology idea describing DeFi as Finance 3.0.

Finance 1.0, which the majority of people consider to be the basis of the current conventional financial system, can be characterized as the world of gold and central banks. From the middle of the 17th century, we utilized coins and bills that were backed by gold and were issued by sovereign nations for about 400 years. The connection between the gold backing our currency's coins and notes has in the 20th century vanished. 

Finance 1.0 was a financial system that solely relied on the rules of central banks, commercial banks, and fiat currency backed by actual gold reserves. In the United States, for instance, the U.S. dollar lost its connection to gold in 1971, signaling the end of the "gold standard."

With the development of the Internet, Finance 2.0 arose and made it possible to digitize money. However, nation-states, commercial banks, and existing institutions continue to play a fundamentally key role in Finance 2.0. Each component of the financial system was [digitalized](https://leofinance.io/posts/@leoglossary/leoglossary-digital) in Finance 2.0, including banking services, payments, and intermediaries.

Decentralized Finance also known as Finance 3.0, combines the concepts of smart contracts, programmable money, and partnerships with no mutual trust. They have created an innovative, open financial system that will take the place of conventional finance. [Peer-to-peer](https://leofinance.io/posts/@leoglossary/leoglossary-p2p) finance 3.0 is permissionless. Anyone, everywhere, can participate in this regardless of their color, religion, gender, ethnicity, or country of birth. It is a genuinely egalitarian system that makes finance accessible to all nations, not just a select group of powerful economies.  

# How to Access DeFi?

How to access DeFi? To access DeFi, you will need three things: 

* The Internet

* A personal computer or smartphone, and 

* A DeFi [wallet](https://leofinance.io/posts/@leoglossary/leoglossary-wallet)

On Hive, we have so many wallets. It appears to me that all front-ends built on Hive have their wallets, so obtaining one is not a problem on Hive. 
 
# Conclusion and Practical Steps

The global financial system has been in serious trouble for more than a century now. Instead of addressing this problem, policymakers throughout history just expanded them. You will learn this as you study a crash course on monetary history. 

The 2008 crash of the housing market opened the eyes of investors all over the world and public officials and financial institutions cannot be trusted. It was at the height of such a crisis that an electronic payment system based on blockchain technology was introduced. 

With COVID-19 and the lockdown that caused global fear making almost everyone gullible to the mainstream narrative have not only threatened our lives but also the stability and strength of our minds as well as the source of our livelihood, we are now seeing a response to a global scale that most people are still unaware of. As we speak, technology, finance, and fun are joining forces to provide somehow temporary relief from emotional and mental stress and an alternative source of income. 

Before investing in any DeFi [protocol](https://leofinance.io/posts/@leoglossary/leoglossary-protocol), you have to do the following:  

* One, do your own research (DYOR). The way to fight risk is not to avoid it but to inform yourself.  

* Two, find a way to increase your income by increasing your passive income and limiting your expenses. The aim of why you are doing the first two is to increase your [cash flow.](https://leofinance.io/posts/@leoglossary/leoglossary-cash-flow) Add your monthly cash flow to your cash on hand. As your cash on hand increases, you can now look for a more lucrative investment that will later add to your passive income.

* Finally, start small, be patient, and be tough!

Understanding the biblical and theological origin of the current crisis in our civilization as well as understanding the importance of cash flow and blockchain technology is vital information for anyone who dreams to achieve his goal of financial freedom. It is exactly at this point, that making yourself informed about the nature and character of cryptocurrencies as well as the current trends in financial technology and decentralized finance will help you achieve such a goal. Remember that cryptocurrencies are the financial manifestation of the concept of self-sovereignty, a way to return power back to the people. 

### Grace and peace!

[What is Hive](https://ecency.com/post/@leoglossary/leoglossary-what-is-hive)

[What is LeoFinance?](https://leofinance.io/@leoglossary/leoglossary-what-is-leofinance)  

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Here is the complete series of my articles on ***The Way to Financial Freedom:***

* [The Way to Financial Freedom Part 1](https://peakd.com/hive-167922/@rzc24-nftbbg/the-way-to-financial-freedom-part-1)

* [The Way to Financial Freedom Part 2](https://peakd.com/hive-167922/@rzc24-nftbbg/the-way-to-financial-freedom-part-2)

* [The Way to Financial Freedom Part 3
](https://peakd.com/hive-167922/@rzc24-nftbbg/the-way-to-financial-freedom-part-3)
* [The Way to Financial Freedom Part 4
](https://peakd.com/hive-167922/@rzc24-nftbbg/the-way-to-financial-freedom-part-4)
* [The Way to Financial Freedom Part 5](https://peakd.com/hive-167922/@rzc24-nftbbg/the-way-to-financial-freedom-part-5)

* The Way to Financial Freedom: The Conclusion