This DeFi thing is big, large, involves money, teh future; is probably bubbly. There's not a lot to understand IMO. It's a wave of emotions wrapped into "tech". It's wise to treat it like a ~thing and see how it evolves.
I think the more likely explanation is that it's a way for people who own crypto to borrow and lend.
It's probably one of the first things to be built because there's a lot of people with crypto and banks don't want to accept it as collateral.