Decentralized Finance (DeFi)

Defi is a broad category of smart contracts which loosely correspond to digital investment schemes running on a blockchain which allow users to create overcollateralized loans out of stablecoin and which have side payouts in so-called "governance tokens".

DeFi generally refers to a collection of services which offer lending products offered by non-banks and which exist outside the regulatory perimeter as a form regulatory arbitrage and to fund margin trading activities to speculaate on crypto assets.

See also yield farming, AMM, DEX and shadow bank.


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  13. Maia, Guilherme, and Jo√£o Vieira dos Santos. 2021. ‚ÄėMiCA and DeFi (‚ÄúProposal for a Regulation on Market in Crypto-Assets‚ÄĚ and ‚ÄôDecentralised Finance‚Äô)‚Äô. SSRN Electronic Journal.
  14. Nedashkovskiy, Alexander. 2021. ‚ÄėUnderstanding DeFi Ecosystem and How Can It Change or Transform Existing Financial System‚Äô.
  15. Qin, Kaihua, Liyi Zhou, Yaroslav Afonin, Ludovico Lazzaretti, and Arthur Gervais. 2021. ‚ÄėCeFi vs. DeFi ‚Äď Comparing Centralized to Decentralized Finance‚Äô. ArXiv Preprint ArXiv:2106.08157.
  16. Saengchote, Kanis. 2021. ‚ÄėA DeFi Bank Run: Iron Finance, IRON Stablecoin, and the Fall of TITAN‚Äô. IRON Stablecoin, and the Fall of TITAN (July 16, 2021).
  17. Sch√§r, Fabian. 2021. ‚ÄėDecentralized Finance: On Blockchain-and Smart Contract-Based Financial Markets‚Äô. Federal Reserve Bank of St. Louis Review 103 (2): 153‚Äď74.
  18. Sun, Xiaotong. 2021. ‚ÄėCentralized Governance in Decentralized Finance (DeFi): A Case Study of MakerDAO‚Äô. SSRN Electronic Journal.
  19. Zetzsche, Dirk A., Douglas W. Arner, and Ross P. Buckley. 2020. ‚ÄėDecentralized Finance‚Äô. Journal of Financial Regulation 6 (2): 172‚Äď203.