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How does DeFi work? The real magic behind DeFi is these things called smart contracts. They're self-executing agreements coded on the blockchain and facilitate business all on their own. When certain conditions are met, these contracts kick into gear and make things happen without any intermediaries getting in the way. That means saying goodbye to all the unnecessary costs and inefficiencies. Let us paint you a picture: imagine you wanna borrow some cash through a lending protocol. You put up some digital assets as collateral, and boom! They get locked up in a smart contract. Then, that contract automatically releases the loan amount in a specific cryptocurrency. You've got a timeframe to repay it, with a little extra interest, of course. The entire process is transparent, secure and does not require a traditional financial institution's involvement.