Decentralized finance (DeFi) is an emerging and rapidly evolving area in the blockchain environment. Although examples of DeFi have existed for several years, a sudden upsurge of activity in 2020 has simulated interest from the private and public sectors. This toolkit highlights DeFi’s distinguishing characteristics and opportunities, while also calling attention to the new and existing risks. As well as providing an overview of the DeFi space generally, it maps out the potential legal and regulatory responses.