Originally a post at Cryptoeconomics with the RMIT Blockchain Innovation Hub team.
The financial sector exists solely to smooth economic activity and trade. It is the network of organisations, markets, rules, and services that move capital around the global economy so it can be deployed to the most profitable use.
It has evolved as modern capitalism has evolved, spreading with the development of property rights and open markets. It has grown as firms and trade networks became globalised, and supercharged as the global economy became digitised.
Decentralised finance (defi) is trying to do all that. But just since 2019, and entirely on the internet.