Araştırma Makalesi


DOI :10.26650/ibr.2024.53.1426335   IUP :10.26650/ibr.2024.53.1426335    Tam Metin (PDF)

Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies

Remy Jonkam ObenFezile Özdamlı

The 2008-2009 global financial crisis resulted in a loss of trust in traditional financial systems and the need to decentralize and democratize finance. This coincided with the birth of blockchain technology, marked by creating the pioneer cryptocurrency, bitcoin (BTC), in 2009. As blockchain technology has gained prominence, decentralized finance (DeFi) has emerged, transforming the financial landscape and offering financial services without the need for traditional financial intermediaries. While the disruption of traditional finance has opened up new opportunities, it has also introduced significant risks to the financial sector. In this study, we follow the PRISMA approach (systematic literature review) to identify several DeFi benefits and challenges, as discussed in the existing literature. Based on the Scopus database, we critically scrutinized 64 published articles to report that although DeFi promotes financial inclusion and enhances financial transparency and accountability, the ecosystem also faces security issues, regulatory ambiguities, and price volatility. By providing a balance between the benefits and risks associated with DeFi, this study will help investors and other stakeholders make informed decisions and will serve as a valuable resource for formulating strategies to better regulate the DeFi ecosystem.

Anahtar Kelimeler: Decentralized financeDeFibenefitsrisksPRISMA

PDF Görünüm

Referanslar

  • Alamsyah, A., & Syahrir, S. (2023). The Taxonomy of Blockchain-based Technology in the Financial Industry. F1000Research, 12, 457. google scholar
  • Allen, F., Gu, X., & Jagtiani, J. (2022). Fintech, cryptocurrencies, and CBDC: Financial structural transformation in China. Journal of International Money and Finance, Vol. 124, pp.102625. google scholar
  • Alsagheer, D., Xu, L., & Shi, W. (2023). Decentralized Machine Learning Governance: Overview, Opportunities, and Challenges. IEEE Access. google scholar
  • Al-Shaibani, H. Lasla, N. & Abdallah, M. (2020). Consortium blockchain-based decentralized stock exchange platform. IEEE Access, 8, 123711-123725. google scholar
  • Amini, H., Bichuch, M., & Feinstein, Z. (2023). Decentralized payment clearing using blockchain and optimal bidding. European Journal of Operational Research, 309(1), 409-420. google scholar
  • Andolfatto, D., & Martin, F. M. (2022). Blockchain Revolution: Decoding Digital Currencies. Federal Reserve Bank of St. Louis Review. google scholar
  • Aspembitova, A. T., & Bentley, M. A. (2022). Oracles in Decentralized Finance: Attack Costs, Profits, and Mitigation Measures. Entropy, 25(1), 60. google scholar
  • Axelsen, H., Jensen, J. R., & Ross, O. (2023). When is a DAO Decentralized? arXiv preprint arXiv:2304.08160 google scholar
  • Barbereau, T., & Bodô, B. (2023). Beyond financial regulation of crypto-asset wallet software: In search of secondary liability. Computer Law and Security Review, 49, 105829. google scholar
  • Barbereau, T., Smethurst, R., Papageorgiou, O., Sedlmeir, J., & Fridgen, G. (2023). Decentralized Finance’s timocratic governance: The distribution and exercise of tokenized voting rights. Technology in Society, 73, 102251. google scholar
  • Bartoletti, M., Chiang, J. H. Y., & Lluch-Lafuente, A. (2022). A Theory of Automated Market Makers in Defi. Log. Methods Comput. Sci. 18, google scholar
  • Bennett, D., Mekelburg, E., & Williams, T. H. (2023). BeFi meets DeFi: A behavioral finance approach to decentralized finance asset pricing. Research in International Business and Finance, 65, 101939. google scholar
  • Borisov, S. (2022). DEFI-Potential, Advantages and Challenges. IlkOHOAiwiecku u3cnedBam%, (4), 33-54. google scholar
  • Burger, C., & Weinmann, J. (2022). Blockchain Platforms in Energy Markets—A Critical Assessment. Journal of Risk and Financial Management, 15(11), 516. google scholar
  • Chaklader, B., Gupta, B. B., & Panigrahi, P. K. (2023). Analyzing the progress of FINTECH companies and their integration with new technologies for innovation and entrepreneurship. Journal of Business Research 161, 113847. google scholar
  • Chen, K. S., &Chang, S. H. (2022). Volatility Co-Movement between Bitcoin and stablecoins: BEKK-GARCH and copula-DCC-GARCH Approaches. Axioms, 11(6), 259. google scholar
  • Chen, X., Miraz, M. H., Gazi, M. A. I., Rahaman, M. A., Habib, M. M., & Hossain, A. I. (2022). Factors affecting cryptocurrency adoption in digital business transactions: The mediating role of customer satisfaction. Technology in Society, 70, 102059. google scholar
  • Chen, Y., & Bellavitis, C. (2020). Blockchain disruption and decentralized finance: The rise of decentralized business models. Journal of Business Venturing Insights, 13, e00151. google scholar
  • Chen, Y., & Bellavitis, C. (2020). Blockchain disruption and decentralized finance: The rise of decentralized business models. Journal of Business Venturing Insights, 13, e00151. google scholar
  • Chiu, J., Kahn, C. M., & Koeppl, T. V. (2022). Grasping decentralized finance through the lens of economic theory. Canadian Journal of Economics/Revue canadienne d’économique, 55(4), 1702-1728. google scholar
  • De Collibus, F. M., Piskorec, M., Partida, A., & Tessone, C. J. (2022). Structural role of smart contracts and exchanges in the centralization of ethereum-based cryptoassets. Entropy, 24(8), 1048. google scholar
  • Dodmane, R., K.R, R., NS, K. R., Kallapu, B., Shetty, S., Aslam, M., & Jilani, S. F. (2023). Blockchain-Based Automated Market Makers for a Decentralized Stock Exchange. Information, 14(5), 280. google scholar
  • Grassi, L., Lanfranchi, D., Faes, A., & Renga, F. M. (2022). Do we still need financial intermediation? The case of decentralized finance: DeFi. Qualitative Research in Accounting & Management, 19(3), 323-347. google scholar
  • Hameed, B. I. (2019). Blockchain and Cryptocurrency Technology: a survey. JOIV: International Journal on Informatics Visualization, 3(4), 355-360. google scholar
  • Han, C. S., Lotfi Ghahroud, M., Park, M. J., & Ghassemi Nejad, J. (2023). A new blockchain investment and energy certificate platform. Cogent Engineering, 10(2), 2260226. google scholar
  • Hassan, M., Jincai, C., Iftekhar, A., & Cui, X. (2020). Future of the Internet of Things Using Blockchain and Smart Contracts. Future, 11(6). google scholar
  • Hickey, L., & Harrigan, M. (2022). Bisq decentralized exchange: Effect of privacy cost of participation. Blockchain: Research and Applications, 3(1), 100029. google scholar
  • Jensen, J. R., von Wachter, V., & Ross, O. (2021). An introduction to decentralized finance (defi). Complex Systems Informatics and Modeling Quarterly, (26), 46-54. google scholar
  • Kaur, S., Singh, S., Gupta, S., & Wats, S. (2023). Risk analysis in decentralized finance (DeFi): a fuzzy-AHP approach. Risk Management, 25(2), 13. google scholar
  • Kim, H., Kim, H. S., & Park, Y. S. (2022). Perpetual Contract NFT as Collateral for DeFi Composability. IEEE Access, 10, 126802-126814. google scholar
  • Kim, W., Kim, J. H., Cha, Y. K., Chong, S., & Kim, T. J. (2023). Completeness of Reporting of Systematic Reviews and Meta-Analysis of Diagnostic Test Accuracy (DTA) of Radiological Articles Based on the PRISMA-DTA Reporting Guideline. Academic Radiology, 30(2), 258-275. google scholar
  • Kitzler, S., Victor, F., Saggese, P., & Haslhofer, B. (2023). Disentangling decentralized finance (DeFi) compositions. ACM Transactions on the Web, 17(2), 1-26. google scholar
  • Kumari, A., & Devi, N. C. (2022). The impact of fintech and blockchain technologies on banking and financial services. Technology Innovation Management Review, 12(1/2). google scholar
  • Li, X., & Shen, X. (2022). Blockchain Technology-Based Electronic Payment Strategy for City Mobile Pass Cards. Mobile Information Systems, 2022. google scholar
  • Lupaiescu, S., Cioata, P., Turcu, C. E., Gherman, O., Turcu, C. O., & Paslaru, G. (2022). Centralized vs. Decentralized: Performance Comparison between BigchainDB and Amazon QLDB. Applied Sciences, 13(1), 499. google scholar
  • Metelski, D., & Sobieraj, J. (2022). Decentralized Finance (DeFi) Projects: A Study of Key Performance Indicators in Terms of DeFi Protocols’ Valuations. International Journal of Financial Studies, 10(4), 108. google scholar
  • Mnohoghitnei, I., Horobet, A., & Bela^cu, L. (2022). Bitcoin is so Last Decade—How Decentralized Finance (DeFi) could Shape the Digital Economy. European Journal of Interdisciplinary Studies, 14(1). google scholar
  • Momtaz, P. P. (2022). How Efficient is Decentralized Finance (DeFi)?. Available at SSRN 4063670. google scholar
  • Musa, H. H., Yinka, A. T., Oderinde, O., Musa, T. H., Ahmed, A. A., Fedail, J. S., ... & Cai, D. (2023). Gum: Syatematic and thematic analysis of the top 100 most-cited articles indexed in the Scopus database. Bioactive Carbohydrates and Dietary Fiber, 100359. google scholar
  • Ozili, P. K. (2022). Decentralized finance research and developments around the world. Journal of Banking and Financial Technology, 6(2), 117-133. google scholar
  • Pandey, D. K., Hassan, M. K., Kumari, V., Zaied, Y. B., & Rai, V. K. (2023). Mapping the Landscape of Fin-Tech in Banking and Finance: A Bibliometric Review. Research in International Business and Finance, 102116. google scholar
  • Park, K., & Youm, H. Y. (2022). Proposal of Decentralized P2P Service Model for Transfer between Blockchain-Based Heterogeneous Cryptocurrencies and CBDCs. Big Data and Cognitive Computing, 6(4), 159. google scholar
  • Patel, H., & Shrimali, B. (2021). AgriOnBlock: Secured data harvesting for the agricultural sector using blockchain technology. ICT Express. google scholar
  • Popescu, A. D. (2020). Decentralized finance (defi)-the lego of finance. Social Sciences and Education Research Review, 7(1), 321-349. google scholar
  • Renduchintala, T., Alfauri, H., Yang, Z., Pietro, R. D., & Jain, R. (2022). A survey of blockchain applications in the fintech sector. Journal of Open Innovation: Technology, Markets, and Complexity, 8(4), 185. google scholar
  • Rikken, O., Janssen, M., & Kwee, Z. (2023). Governance impacts of blockchain-based decentralized autonomous organizations: an empirical analysis. Policy Design and Practice, 1-23. google scholar
  • Saengchote, K. (2023). Decentralized lending and its users: Insights from Compound. Journal of International Financial Markets, Institutions and Money, 87, 101807. google scholar
  • Saengchote, K., Putnins, T., & Samphantharak, K. (2023). Does DeFi remove the need for trust? Evidence from a natural experiment on stapleton lending. Journal of Behavioral and Experimental Finance, 100858. google scholar
  • Salami, I. (2021). Challenges and approaches to regulating decentralized finance. American Journal of International Law, 115, 425-429. google scholar
  • Schär, F. (2021). Decentralized finance: Blockchain- and smart contract-based financial markets. FRB, St. Louis Review. google scholar
  • Schueffel, P. (2021). DeFi: Decentralized Finance-An Introduction and Overview. Journal of Innovation Management, 9(3), I-XI. google scholar
  • Schuler, K., Nadler, M., & Schär, F. (2023). Contagion and loss redistribution in cryptocurrency asset markets. Economics Letters, 231, 111310. google scholar
  • Seven, S., Yoldas, Y., Soran, A., Yalcin Alkan, G., Jung, J., Ustun, T. S., & Onen, A. (2022). Energy trading on a peer-to-peer basis between virtual power plants using decentralized finance instruments. Sustainability, 14(20), 13286. google scholar
  • Shahbazi, Z., & Byun, Y. C. (2022). Analysis of the security and reliability of cryptocurrency systems using knowledge discovery and machine learning methods. Sensors, 22(23), 9083. google scholar
  • Shokri, A., Shokri, A., White, D., Gelski, R., Goldberg, Y., Harrison, S., & Rashidi, T. H. (2022). EnviroCo-in: A Holistic, Blockchain Empowered, Consensus-Based Carbon Saving Unit Ecosystem. Sustainability, 14(12), 6979. google scholar
  • Song, A., Seo, E., & Kim, H. (2023). Anomaly VAE-Transformer: A Deep Learning Approach for Anomaly Detection in Decentralized Finance. IEEE Access. google scholar
  • Stein Smith, S. (2021) Decentralized Finance & Accounting - Implications, Considerations, and Opportunities for Development. International Journal of Digital Accounting Research. 129-153. doi:10.4192/1577-8517-v21_5. google scholar
  • Stepanova, V., & Erins, I. (2021). Review of Decentralized Finance Applications and Their Total Value Locked. TEM Journal, 10(1). google scholar
  • Tetiana, Z., Volodymyr, S., Oleksandr, D., Vasyl, B., & Tetiana, D. (2022). Investment models on centralized and decentralized cryptocurrency markets. Scientific Bulletin of the National Mining University, (1). google scholar
  • Tsepeleva, R., & Korkhov, V. (2022). Building DeFi applications using cross-blockchain interaction on Wish swap platform. Computers, 11(6), 99. google scholar
  • Vidal-Tomas, D., Briola, A., & Aste, T. (2023). FTX’s downfall and Binance’s consolidation: the fragility of Centralized Digital Finance. arXiv preprint arXiv:2302.11371. google scholar
  • Weingärtner, T., Fasser, F., Reis Sa da Costa, P., & Farkas, W. (2023). Deciphering DeFi: A Comprehensive Analysis and Visualization of Risks in Decentralized Finance. Journal of Risk and Financial Management, 16(10), 454. google scholar
  • Werner, S., Perez, D., Gudgeon, L., Klages-Mundt, A., Harz, D., & Knottenbelt, W. (2022). Sok: Decentralized finance (defi). In Proceedings of the 4th ACM Conference on Advances in Financial Technologies (pp. 30-46). google scholar
  • Wu, J., Lin, K., Lin, D., Zheng, Z., Huang, H., & Zheng, Z. (2023). Financial Crimes in Web3-empowered Metaverse: Taxonomy, Countermeasures, and Opportunities. IEEE Open Journal of the Computer Society, 4, 37-49. google scholar
  • Xu, J., & Feng, Y. (2022). Reap the harvest on blockchain: A survey of yield farming protocols. IEEE Transactions on Network and Service Management, 20(1), 858-869. google scholar
  • Xu, J., Paruch, K., Cousaert, S., & Feng, Y. (2023a). Sok: Decentralized exchanges (dex) with automated market maker (amm) protocols. ACM Computing Surveys, 55(11), 1-50. google scholar
  • Xu, M., Guo, Y., Hu, Q., Xiong, Z., Yu, D., & Cheng, X. (2023b). A trustless architecture of blockchain-enabled metaverse. High-Confidence Computing, 3(1), 100088. google scholar
  • Yan, W., & Zhou, W. (2023). Is blockchain a cure for peer-to-peer lending?. Annals of Operations Research, 321(1-2), 693-716. google scholar
  • Yang, R. (2022). Development and Supervision of Financial Technology Based on Blockchain. Computational Intelligence and Neuroscience, 2022. google scholar
  • Zachariadis, M., Hileman, G., & Scott, S. V. (2019). Governance and control in distributed ledgers: Understanding the challenges facing blockchain technology in financial services. Information and Organization, 29(2), 105-117. google scholar
  • Zatonatska, T., Suslenko, V., Dluhopolskyi, O., Brych V. & Dluhopolska, T. (2022) Investment models on centralized and decentralized cryptocurrency markets. Naukovyi, V. Natsionalnoho Hirnychoho Univers-ytetu. (1), 177-182. doi:10.33271/nvngu/2022-1/177. google scholar
  • Zetzsche, D. A., Arner, D.W., & Buckley, R. P. (2020). Decentralized finance (defi). Journal of Financial Regulation 6(2), 172-203. google scholar
  • Zhao, Y., Kang, X., Li, T., Chu, C. K., & Wang, H. (2022). Toward trustworthy defi oracles: Past, present, and future. IEEE Access 10, 60914-60928. google scholar
  • Ziegler, C., & Zehra, S. R. (2023). Decoding Decentralized Autonomous Organizations: A Content Analysis Approach to Understanding Scoring Platforms. Journal of Risk and Financial Management, 16(7), 330. google scholar

Atıflar

Biçimlendirilmiş bir atıfı kopyalayıp yapıştırın veya seçtiğiniz biçimde dışa aktarmak için seçeneklerden birini kullanın


DIŞA AKTAR



APA

Oben, R.J., & Özdamlı, F. (2024). Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies. Istanbul Business Research, 53(3), 455-475. https://doi.org/10.26650/ibr.2024.53.1426335


AMA

Oben R J, Özdamlı F. Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies. Istanbul Business Research. 2024;53(3):455-475. https://doi.org/10.26650/ibr.2024.53.1426335


ABNT

Oben, R.J.; Özdamlı, F. Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies. Istanbul Business Research, [Publisher Location], v. 53, n. 3, p. 455-475, 2024.


Chicago: Author-Date Style

Oben, Remy Jonkam, and Fezile Özdamlı. 2024. “Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies.” Istanbul Business Research 53, no. 3: 455-475. https://doi.org/10.26650/ibr.2024.53.1426335


Chicago: Humanities Style

Oben, Remy Jonkam, and Fezile Özdamlı. Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies.” Istanbul Business Research 53, no. 3 (Mar. 2025): 455-475. https://doi.org/10.26650/ibr.2024.53.1426335


Harvard: Australian Style

Oben, RJ & Özdamlı, F 2024, 'Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies', Istanbul Business Research, vol. 53, no. 3, pp. 455-475, viewed 10 Mar. 2025, https://doi.org/10.26650/ibr.2024.53.1426335


Harvard: Author-Date Style

Oben, R.J. and Özdamlı, F. (2024) ‘Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies’, Istanbul Business Research, 53(3), pp. 455-475. https://doi.org/10.26650/ibr.2024.53.1426335 (10 Mar. 2025).


MLA

Oben, Remy Jonkam, and Fezile Özdamlı. Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies.” Istanbul Business Research, vol. 53, no. 3, 2024, pp. 455-475. [Database Container], https://doi.org/10.26650/ibr.2024.53.1426335


Vancouver

Oben RJ, Özdamlı F. Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies. Istanbul Business Research [Internet]. 10 Mar. 2025 [cited 10 Mar. 2025];53(3):455-475. Available from: https://doi.org/10.26650/ibr.2024.53.1426335 doi: 10.26650/ibr.2024.53.1426335


ISNAD

Oben, RemyJonkam - Özdamlı, Fezile. Decentralized Finance (DeFi): Benefits, Risks, and RiskMitigation Strategies”. Istanbul Business Research 53/3 (Mar. 2025): 455-475. https://doi.org/10.26650/ibr.2024.53.1426335



ZAMAN ÇİZELGESİ


Gönderim26.01.2024
Kabul28.10.2024
Çevrimiçi Yayınlanma13.12.2024

LİSANS


Attribution-NonCommercial (CC BY-NC)

This license lets others remix, tweak, and build upon your work non-commercially, and although their new works must also acknowledge you and be non-commercial, they don’t have to license their derivative works on the same terms.


PAYLAŞ




İstanbul Üniversitesi Yayınları, uluslararası yayıncılık standartları ve etiğine uygun olarak, yüksek kalitede bilimsel dergi ve kitapların yayınlanmasıyla giderek artan bilimsel bilginin yayılmasına katkıda bulunmayı amaçlamaktadır. İstanbul Üniversitesi Yayınları açık erişimli, ticari olmayan, bilimsel yayıncılığı takip etmektedir.