DeFi (Decentralized Finance) refers to financial services (trading, lending, borrowing, derivatives) that run on smart contracts on a public blockchain, with no bank or central intermediary.
The basic building blocks are decentralized exchanges (DEXs) such as Uniswap or Curve, lending protocols such as Aave or Compound, and stablecoins, tokens whose value is pegged to a currency such as the dollar. Ethereum and its Layer 2s account for a large share of the activity.
Each protocol is a set of public contracts that anyone can use or combine with others. This openness is also its weakness: a flaw in a contract can cause immediate, irreversible losses, and protocol hacks have been frequent.
In Europe, the MiCA regulation covers crypto-assets and their service providers, but fully decentralized DeFi remains largely outside its scope.
Why it matters when hiring
Strong DeFi profiles are smart contract developers (often in Solidity) with a real security culture: audits, tests, knowledge of past attacks. In an interview, ask them to describe a known exploit and how to prevent it. A candidate who talks about yields rather than technical risks has probably not built a protocol.