Decentralised finance (Defi) is a type of financial application that runs on the blockchain without the need for middle men. A defi application contains a set of financial rules that are defined in a smart contract. This smart contract is then deployed to a blockchain where it is stored and executed by users. Activities like lending, borrowing, trading, saving etc. can all be done using decentralized finance protocols without the need for a middle man, like a bank, government, or other financial institution.
The goal of DeFi is to get rid of the middle men that are involved in financial transactions.