Decentralized finance, or DeFi, is a system by which financial products become available on a public decentralized blockchain network. That makes them open to anyone to use, rather than going through middlemen like banks or brokerages. Unlike a bank or brokerage account, a government-issued ID, Social Security number, or proof of address are not necessary to use DeFi.

More specifically, DeFi refers to a system by which software written on blockchains makes it
possible for buyers, sellers, lenders, and borrowers to interact peer to peer or with a
strictly software-based middleman rather than a company or institution facilitating a transaction.

Source: Forbes