Ethereum is the 2nd largest cryptocurrency by market cap. It is an open-source, distributed computing platform and operating system featuring smart contract functionality. It allows developers to build blockchain applications using the platform. ETH is the token that operates as the “fuel” for the network's engine, particularly for DeFi and NFT applications.
DeFi aims to give users an alternative to the traditional financial systems by removing the need to trust centralised parties. This is achieved by building digital services in an open, permissionless, and decentralised manner. By removing the intermediary and automating many functions of the traditional institutions, DeFi can provide lower costs, higher degrees of security and privacy, resist censorship, increase accessibility, and promote a decision-making democracy.
Most applications that call themselves DeFi are built on top of Ethereum. Examples of DeFi use cases include Decentralized exchanges (DEXs),Stable coins, Lending platforms, prediction markets and yield farming.