Decentralized Finance On Blockchain and Smart Contract Based Financial Markets

The term decentralized finance DeFi refers to an alternative financial infrastructure built on top of the Ethereum blockchain. DeFi uses smart contracts to create protocols that replicate existing financial services in a more open, interoperable, and transparent way. This paper highlights opportunities and potential risks of the DeFi ecosystem. I propose a multi layered framework to analyze the implicit architecture and the various DeFi building blocks, including token standards, decentralized exchanges, decentralized debt markets, blockchain derivatives, and on chain asset management protocols. I conclude that DeFi still is a niche market with certain risks but that it also has interesting properties in terms of efficiency, transparency, accessibility, and compos ability. As such, DeFi may potentially contribute to a more robust and transparent financial infrastructure. Jagjeet Jena | Harsh Singh Chauhan "Decentralized Finance: On Blockchain and Smart Contract-Based Financial Markets" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Special Issue | International Conference on Advances in Engineering, Science and Technology - 2021 , May 2021, URL: https://www.ijtsrd.com/papers/ijtsrd42463.pdf Paper URL : https://www.ijtsrd.com/engineering/computer-engineering/42463/decentralized-finance-on-blockchain-and-smart-contractbased-financial-markets/jagjeet-jena