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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| Format: | Article |
| Language: | English |
| Published: |
Riga Technical University Press
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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| _version_ | 1850174767990046720 |
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| author | Johannes Rude Jensen Victor von Wachter Omri Ross |
| author_facet | Johannes Rude Jensen Victor von Wachter Omri Ross |
| author_sort | Johannes Rude Jensen |
| collection | DOAJ |
| description | 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. |
| format | Article |
| id | doaj-art-caaa0a6742e5485eadc2e5d0ce4c0053 |
| institution | OA Journals |
| issn | 2255-9922 |
| language | English |
| publishDate | 2021-04-01 |
| publisher | Riga Technical University Press |
| record_format | Article |
| series | Complex Systems Informatics and Modeling Quarterly |
| spelling | doaj-art-caaa0a6742e5485eadc2e5d0ce4c00532025-08-20T02:19:35ZengRiga Technical University PressComplex Systems Informatics and Modeling Quarterly2255-99222021-04-01026465410.7250/csimq.2021-26.032513An Introduction to Decentralized Finance (DeFi)Johannes Rude Jensen0Victor von Wachter1Omri Ross2Department of Computer Science, University of Copenhagen, Copenhagen and eToroX Labs, CopenhagenDepartment of Computer Science, University of Copenhagen, CopenhagenDepartment of Computer Science, University of Copenhagen, Copenhagen and eToroX Labs, CopenhagenDecentralized 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.https://csimq-journals.rtu.lv/article/view/4728blockchaindecentralized financedefismart contracts |
| spellingShingle | Johannes Rude Jensen Victor von Wachter Omri Ross An Introduction to Decentralized Finance (DeFi) Complex Systems Informatics and Modeling Quarterly blockchain decentralized finance defi smart contracts |
| title | An Introduction to Decentralized Finance (DeFi) |
| title_full | An Introduction to Decentralized Finance (DeFi) |
| title_fullStr | An Introduction to Decentralized Finance (DeFi) |
| title_full_unstemmed | An Introduction to Decentralized Finance (DeFi) |
| title_short | An Introduction to Decentralized Finance (DeFi) |
| title_sort | introduction to decentralized finance defi |
| topic | blockchain decentralized finance defi smart contracts |
| url | https://csimq-journals.rtu.lv/article/view/4728 |
| work_keys_str_mv | AT johannesrudejensen anintroductiontodecentralizedfinancedefi AT victorvonwachter anintroductiontodecentralizedfinancedefi AT omriross anintroductiontodecentralizedfinancedefi AT johannesrudejensen introductiontodecentralizedfinancedefi AT victorvonwachter introductiontodecentralizedfinancedefi AT omriross introductiontodecentralizedfinancedefi |