An Introduction to Decentralized Finance (DeFi)
Decentralized financial applications (DeFi) are a new breed of consumer-facing financial applications composed as smart contracts, deployed on permissionless blockchain technologies. In this article, we situate the DeFi concept in the theoretical context of permissionless blockchain technology and p...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Riga Technical University
2021-04-01
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| Series: | Complex Systems Informatics and Modeling Quarterly |
| Subjects: | |
| Online Access: | https://csimq-journals.rtu.lv/article/view/4728 |
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| Summary: | Decentralized financial applications (DeFi) are a new breed of consumer-facing financial applications composed as smart contracts, deployed on permissionless blockchain technologies. In this article, we situate the DeFi concept in the theoretical context of permissionless blockchain technology and provide a taxonomical overview of agents, incentives and risks. We examine the key market categories and use-cases for DeFi applications today and identify four key risk groups for potential stakeholders contemplating the advantages of decentralized financial applications. We contribute novel insights into a rapidly emerging field, with far-reaching implications for the financial services. |
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| ISSN: | 2255-9922 |