What is DeFi, and how does it differ from classic Paribu transactions?
DeFi (Decentralized Finance) is a system where financial transactions are carried out through publicly available software (smart contracts) rather than through an institution. The DEX product for which Paribu provides an interface runs on this DeFi layer. The most fundamental difference: in DeFi products, your assets are held not at Paribu but in a self-custody wallet that belongs to you.
What does DeFi mean?
DeFi stands for "decentralized finance." In classic finance (banks, intermediary institutions), an institution carries out your transactions on your behalf and holds your assets. In DeFi, the rules are embedded in software and you confirm transactions directly; there is no intermediary holding your assets in between.
You can think of it this way: your money is held at the bank and the bank approves the transfer. In DeFi, your money is held in your own self-custody wallet; when you want to make a transaction, you give the instruction and an automated system applies the rules.
How does it differ from classic Paribu transactions?
| Classic Paribu transactions | DeFi products | |
|---|---|---|
| Who holds the asset? | Paribu (holds it on your behalf at a crypto asset custody institution operating in Türkiye) or, if you prefer, you (in your own wallet) | You (in your own wallet) |
| Who confirms the transaction? | You confirm it through the Paribu system | You confirm it in your own wallet with a passkey using Face ID / Touch ID |
| Access | Paribu account | A DeFi wallet that belongs to you |
| Where orders are matched | On the Paribu order book | Orders are matched directly in the DeFi liquidity pool, not at Paribu. Paribu does not see the orders and cannot intervene in them. |
Info: Classic Paribu transactions and DeFi products live within the same Paribu app; you do not need to download a separate app.
Which DeFi products are available on Paribu?
- DEX (Decentralized Exchange): Lets you swap tokens instantly through a liquidity pool
Important information
- In DeFi products your assets are held in your own wallet (self-custody); Paribu does not hold your assets and does not act as an intermediary in holding them.
- Your transactions are confirmed with your phone's security feature (via a passkey with Face ID / Touch ID). For this reason, your phone must have the required features.
- DeFi products are volatile instruments; their value can rise and fall with the market and they do not offer guaranteed returns.
- To use DeFi products, identity verification (KYC) must be completed on your Paribu account.
Frequently asked questions
Do I have to use DeFi products?
No. DeFi products are optional; you can keep using the products provided by Paribu as usual.
In DeFi, is my asset held at Paribu?
No. In DeFi products your asset is held in a self-custody wallet that belongs to you. This means you have control of the asset; there is also a recovery safeguard.
Do I need anything extra to use DeFi products?
You can get started by approving the DeFi agreement and risk statement and creating your self-custody wallet.
Related articles
- What are a DeFi wallet, passkey, and self-custody? — The logic behind the DeFi wallet, passkey, and self-custody
- How do I start using DeFi products? — Setup steps with KYC and a DeFi agreement
- What are a DEX (decentralized exchange) and a liquidity pool? — The logic of a DEX and a liquidity pool (AMM)
- Where do I access DeFi products? — Access to DeFi products and prerequisites
Author:
Paribu