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.

References

  1. Allen, Hilary J. 2022. ‚ÄėDeFi: Shadow Banking 2.0?‚Äô William & Mary Law Review, Forthcoming.
  2. Walch, Angela. 2019. ‚ÄėDeconstructing ‚ÄėDecentralization‚Äô: Exploring the Core Claim of Crypto Systems‚Äô. C. Brummer (Ed.), Crypto Assets: Legal and Monetary Perspectives, 1‚Äď36. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3326244.
  3. Anker-S√łrensen, Linn, and Dirk A Zetzsche. 2021. ‚ÄėFrom Centralized to Decentralized Finance: The Issue Of‚Äô. Available at SSRN 3978815. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3978815.
  4. Aramonte, Sirio, Wenqian Huang, and Andreas Schrimpf. 2021. ‚ÄėDeFi Risks and the Decentralisation Illusion‚Äô, 16.
  5. Barbereau, Tom, Reilly Smethurst, Orestis Papageorgiou, Alexander Rieger, and Gilbert Fridgen. 2022. ‚ÄėDeFi, Not So Decentralized: The Measured Distribution of Voting Rights‚Äô. In Proceedings of the 55th Hawaii International Conference on System Sciences. https://scholarspace.manoa.hawaii.edu/handle/10125/80074.
  6. Barbereau, Tom, Reilly Smethurst, Orestis Papageorgiou, Johannes Sedlmeir, and Gilbert Fridgen. 2022. ‚ÄėDecentralised Finance‚Äôs Unregulated Governance: Minority Rule in the Digital Wild West‚Äô. Available at SSRN. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4001891.
  7. Brennecke, Martin, Benjamin Schellinger, Nils Urbach, and Tobias Guggenberger. 2022. ‚ÄėThe De-Central Bank in Decentralized Finance: A Case Study of MakerDAO‚Äô. In 55th Hawaii International Conference on System Sciences (2022). https://doi.org/10.24251/HICSS.2022.737.
  8. Chen, Yan, and Cristiano Bellavitis. 2020. ‚ÄėBlockchain Disruption and Decentralized Finance: The Rise of Decentralized Business Models‚Äô. Journal of Business Venturing Insights 13. https://doi.org/10.1016/j.jbvi.2019.e00151.
  9. Ciriello, Raffaele Fabio. 2021. ‚ÄėTokenized Index Funds: A Blockchain-Based Concept and a Multidisciplinary Research Framework‚Äô. International Journal of Information Management 61: 102400. https://doi.org/10.1016/j.ijinfomgt.2021.102400.
  10. Eikmanns, Benedikt C., Pascal Mehrwald, Isabell M. Welpe, and Philipp G. Sandner. n.d. ‚ÄėIs Ethereum the New IOS? Exploring the Platform Economy of Decentralized Finance‚Äô. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3992625.
  11. Harwick, Cameron, and James Caton. 2020. ‚ÄėWhat‚Äôs Holding Back Blockchain Finance? On the Possibility of Decentralized Autonomous Finance‚Äô. Quarterly Review of Economics and Finance, October. https://doi.org/10.1016/j.qref.2020.09.006.
  12. Johnson, Kristin N. 2021. ‚ÄėDecentralized Finance: Regulating Cryptocurrency Exchanges‚Äô. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3831439.
  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. https://doi.org/10.2139/ssrn.3875355.
  14. Nedashkovskiy, Alexander. 2021. ‚ÄėUnderstanding DeFi Ecosystem and How Can It Change or Transform Existing Financial System‚Äô. https://lutpub.lut.fi/handle/10024/162989.
  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. http://arxiv.org/abs/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. https://doi.org/10.20955/r.103.153-74.
  18. Sun, Xiaotong. 2021. ‚ÄėCentralized Governance in Decentralized Finance (DeFi): A Case Study of MakerDAO‚Äô. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3971791.
  19. Zetzsche, Dirk A., Douglas W. Arner, and Ross P. Buckley. 2020. ‚ÄėDecentralized Finance‚Äô. Journal of Financial Regulation 6 (2): 172‚Äď203. https://doi.org/10.1093/jfr/fjaa010.