> For the complete documentation index, see [llms.txt](https://docs.leather.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.leather.io/learn/what-is-bitcoin-defi.md).

# What is DeFi?

Bitcoin DeFi is lending, trading and other financial services run by smart contracts on Bitcoin layers, without a bank or broker.

Decentralized finance (DeFi) is financial services run by smart contracts instead of banks or brokers. You trade, lend or borrow directly from your wallet, and the contract enforces the rules. Bitcoin DeFi is DeFi that uses bitcoin or runs on a Bitcoin layer such as Stacks.

## What DeFi offers

* **Open access:** you need a wallet, not an account or approval.
* **Self-custody:** your assets stay in your wallet or in a contract, not with a company.
* **Transparency:** contract code and transactions are public.
* **Always on:** contracts run at any hour.

## What DeFi risks

* A bug in a contract can lose deposited funds.
* Prices and yields change quickly.
* A bridged or wrapped asset depends on whoever holds the original.
* No support desk can reverse a transaction.

## Common DeFi apps

* **Exchanges (DEXs):** swap tokens through liquidity pools.
* **Lending:** supply assets to earn interest, or borrow against collateral.
* **Stablecoins:** tokens that track a currency such as the US dollar.
* **Staking:** lock tokens to earn protocol rewards, such as STX-only staking or liquid staking on Stacks.

## DeFi with Leather

Leather is a self-custody wallet that connects to DeFi apps on Stacks and signs their transactions. It also swaps Stacks tokens on its own Swap screen and stakes STX on app.leather.io. See [Connect to apps](/get-started/connect-apps.md) and [Getting started with STX-only staking](/stacking/getting-started-with-stacking.md).