What is DeFi, and how does it differ from classic Paribu transactions?
DeFi (decentralized finance) is a system in which financial transactions are carried out through publicly available software (smart contracts) rather than an institution. The DEX product for which Paribu provides the 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 transactions on your behalf and holds your assets. In DeFi, the rules are embedded in software and you approve transactions directly; there is no intermediary holding your assets.
You can think of it this way: your money is held at a 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 (held on your behalf at a crypto asset custody institution operating in Türkiye) or you, if you prefer (in your own wallet) | You (in your own wallet) |
| Who approves the transaction? | You approve it through the Paribu system | You approve it in your own wallet with your passkey (your face, fingerprint, or device password) |
| Access | Paribu account | Your own DeFi wallet |
| Where do orders match? | On the Paribu order book | Orders match directly in the DeFi liquidity pool, not at Paribu. Paribu does not see the orders and cannot intervene in them. |
Note: Classic Paribu transactions and DeFi products are in the same Paribu app; you do not need to download a separate application
Which DeFi products are on Paribu?
- DEX (decentralized exchange): Lets you swap tokens instantly through a liquidity pool
You can reach the DeFi area from the DeFi chip in the Crypto tab of the Markets screen.
Important information
- In DeFi products your assets are held in your own wallet (self-custody); Paribu does not hold your assets or act as an intermediary in holding them
- Your transactions are approved with the passkey you create on your device — you use your face, fingerprint, or device password
- DeFi products are volatile instruments; their values can rise and fall with the market and they offer no guaranteed return
- Transactions made on the blockchain cannot be reversed; doing research before transacting is recommended
- To use DeFi products, your account verification must be complete on your Paribu account
Frequently asked questions
Do I have to use DeFi products?
No. DeFi products are optional; you can continue using the products provided by Paribu as usual.
Is my asset in DeFi held at Paribu?
No. In DeFi products your asset is held in a self-custody wallet that belongs to you. This means the control of the asset is yours; a recovery safeguard is also available.
Is anything extra required to use DeFi products?
You can get started by approving the risk statement and terms of use and creating your self-custody wallet with your passkey.
Do I need to deposit a separate balance to buy and sell tokens in DeFi?
No. When you buy on the DEX, the USDT in your Paribu balance is used; you do not need to create a separate DeFi balance.
Related articles
- What are a DeFi wallet, passkey, and self-custody? — The DeFi wallet, passkey, and self-custody logic
- How do I start using DeFi products? — Setup steps with account verification and approvals
- What are a DEX (decentralized exchange) and a liquidity pool? — DEX and liquidity pool (AMM) logic
- Where and how do I access DeFi products? — DeFi product access and prerequisites
Author:
Paribu