Decentralized Finance (DeFi) is a hypernym of several peer-to-peer financial services built with various overlapping smart contracts on public blockchains. The DeFi industry consists of multiple ecosystems built on different blockchains with varying degrees of interoperability.
Interoperability is required to reduce barriers that impede the flow of capital from one ecosystem to another. The composable nature of public blockchain-based applications allows for the rapid development and experimentation of niche and complex services; the degree of composability is also beholden to interoperability solutions.
DeFi services are also characterized by constant uptime and availability, in contrast to traditional financial services that are subject to specific and constrained hours of availability. Compared to traditional finance systems, DeFi does not rely upon centralized authorities who guarantee access to markets and services. The automated and decentralized nature of DeFi significantly changes its security and risk assessment.