Decentralized Finance: On Blockchain- and Smart Contract-based Financial Markets
Decentralized Finance: On Blockchain- and Smart Contract-based Financial Markets ArXiv ID: ssrn-3571335 “View on arXiv” Authors: Unknown Abstract The term decentralized finance (DeFi) refers to an alternative financial infrastructure built on top of the Ethereum blockchain. DeFi uses smart contracts to cr Keywords: Decentralized Finance (DeFi), Smart Contracts, Blockchain, Ethereum, Tokenomics, Crypto Complexity vs Empirical Score Math Complexity: 2.5/10 Empirical Rigor: 3.0/10 Quadrant: Philosophers Why: The paper provides a conceptual framework and survey of DeFi architecture with minimal advanced mathematics, focusing on high-level descriptions rather than dense formulas. Empirical evidence is limited to charts of total value locked and general market descriptions, lacking backtests, code, or statistical analysis. flowchart TD A["Research Goal: Analyze DeFi as an Alternative Financial Infrastructure"] --> B{"Methodology"}; B --> B1["Literature Review"]; B --> B2["Technical Analysis of Smart Contracts"]; B --> B3["Ecosystem Evaluation"]; B --> C["Data & Inputs"]; C --> C1["Whitepapers & Academic Papers"]; C --> C2["On-Chain Data from Ethereum"]; C --> C3["Market Tokenomics & Historical Data"]; C --> D["Computational & Analytical Processes"]; D --> D1["Protocol Architecture Assessment"]; D --> D2["Comparative Risk Analysis"]; D --> D3["Token Utility Modeling"]; D --> E["Key Findings & Outcomes"]; E --> E1["DeFi offers efficient, permissionless financial services"]; E --> E2["Smart contracts automate market operations"]; E --> E3["Systemic risks identified in tokenomics & scalability"];