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Innovative Risk Management Solutions in DeFi: A Study of Tracking Platforms

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  • Imran Hussain Shah

Abstract

Purpose: The rapid expansion of Decentralized Finance (DeFi) has revolutionized financial services by eliminating intermediaries and enabling peer-to-peer interactions through blockchain-based smart contracts. However, this innovation introduces significant risk management challenges, including smart contract vulnerabilities, transaction opacity, and compliance limitations. This study investigates the effectiveness of six leading DeFi tracking platforms—Chainalysis, Elliptic, Nansen, Dune Analytics, DeBank, and Etherscan—in mitigating these risks. Design/Methodology/Approach: Employing a mixed-methods approach, the research integrates survey data (n = 138), expert interviews, and platform metrics, analyzed through advanced statistical techniques such as T-Test, MANOVA, Logistic Regression, Kruskal–Wallis H Test, Cohen’s D Effect Size, Survival Analysis, Cluster Analysis, and a Utility-Based Scoring Model. Findings: Results reveal significant differences in platform performance, with Chainalysis and Etherscan emerging as top performers in compliance and usability, respectively. Practical Implications: This study provides a user-prioritized, data-driven framework for evaluating DeFi risk management platforms and offers actionable insights for developers, investors, and regulators seeking to enhance the transparency, security, and sustainability of the DeFi ecosystem. Originality/Value: The utility model highlights the importance of real-time alerts, trust, and compliance tools in platform adoption.

Suggested Citation

  • Imran Hussain Shah, 2025. "Innovative Risk Management Solutions in DeFi: A Study of Tracking Platforms," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 15(3), pages 18-36.
    • Handle: RePEc:ers:ijfirm:v:15:y:2025:i:3:p:18-36
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    References listed on IDEAS

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    1. Fabian Schär, 2021. "Decentralized Finance: On Blockchain- and Smart Contract-Based Financial Markets," Review, Federal Reserve Bank of St. Louis, vol. 103(2), pages 153-174, April.
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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System

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