IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/114338.html

Decentralized finance research and developments around the World

Author

Listed:
  • Ozili, Peterson K

Abstract

Decentralized finance is financial services offered on a public blockchain over the internet. This paper reviews the decentralized finance (DeFi) research and development around the world. The findings of the literature review are that decentralized finance offers many benefits such as broadening financial inclusion; encouraging permission-less innovation; eliminating the need for intermediaries; ensuring the immutability of transactions; censorship resistance and making cross-border transactions cheaper. The associated risks include execution risk in smart contracts, legal liability risk, data theft risk, interconnectedness risk, external data risk, and greater propensity for illicit activity using DeFi applications. The review of existing DeFi research show that there are few studies on DeFi, and a large number of DeFi research studies are non-empirical studies. Most studies hold a positive view about DeFi. They emphasize the benefits of DeFi in great depth but the challenges of DeFi were not analysed in great depth, and there are no critical studies on DeFi. Observations on DeFi developments from around the world show that there is growing interest in decentralized finance in Europe, U.S., Asia and Oceania. There are concerns that regulating decentralized finance can impede growth in decentralized finance markets in Asia. There are also concerns that banning crypto assets can hinder the growth of decentralized finance in African countries where regulators do not fully permit blockchain-enabled cryptocurrencies. Several policy issues associated with DeFi are discussed. Areas for further research are provided to advance the literature on decentralized finance.

Suggested Citation

  • Ozili, Peterson K, 2022. "Decentralized finance research and developments around the World," MPRA Paper 114338, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:114338
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/114338/1/MPRA_paper_114338.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chen, Yan & Bellavitis, Cristiano, 2020. "Blockchain disruption and decentralized finance: The rise of decentralized business models," Journal of Business Venturing Insights, Elsevier, vol. 13(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wolfgang Drobetz & Lars Hornuf & Paul P. Momtaz & Niclas Schermann, 2025. "Token-Based Crowdfunding: Investor Choice and the Optimal Timing of Initial Coin Offerings," Entrepreneurship Theory and Practice, , vol. 49(1), pages 232-282, January.
    2. Sujeeth Ungratwar & Dipasha Sharma & Satish Kumar, 2025. "Mapping the digital banking landscape: a multi-dimensional exploration of fintech, digital payments, and e-wallets, with insights into current scenarios and future research," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-22, December.
    3. Remy Jonkam Oben & Aliya Zhakanova Isiksal, 2026. "Decentralized finance portfolio optimization: assessing green and brown investments before, during, and after COVID-19," Economic Change and Restructuring, Springer, vol. 59(2), pages 1-51, April.
    4. Su, Dan & Zhang, Lijun & Peng, Hua & Saeidi, Parvaneh & Tirkolaee, Erfan Babaee, 2023. "Technical challenges of blockchain technology for sustainable manufacturing paradigm in Industry 4.0 era using a fuzzy decision support system," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    5. Mansoureh Beheshti Nejad & Seyed Mahmoud Zanjirchi & Seyed Mojtaba Hosseini Bamakan & Negar Jalilian, 2024. "Blockchain Adoption in Operations Management: A Systematic Literature Review of 14 Years of Research," Annals of Data Science, Springer, vol. 11(4), pages 1361-1389, August.
    6. Mahmoona Khalil & Kausar Fiaz Khawaja & Muddassar Sarfraz, 2022. "The adoption of blockchain technology in the financial sector during the era of fourth industrial revolution: a moderated mediated model," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(4), pages 2435-2452, August.
    7. Li, Sen & Chen, Yan, 2024. "Governing decentralized autonomous organizations as digital commons," Journal of Business Venturing Insights, Elsevier, vol. 21(C).
    8. Yousaf, Imran & Jareño, Francisco & Tolentino, Marta, 2023. "Connectedness between Defi assets and equity markets during COVID-19: A sector analysis," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    9. Thewissen, James & Shrestha, Prabal & Torsin, Wouter & Pastwa, Anna M., 2022. "Unpacking the black box of ICO white papers: A topic modeling approach," Journal of Corporate Finance, Elsevier, vol. 75(C).
    10. Ahmet Faruk Aysan & Nawaz Farrukh, 2021. "China's Transition to a Digital Currency: Does It Threaten Dollarization?," Working Papers hal-03364939, HAL.
    11. Kamer-Ainur Aivaz & Ionela Florea Munteanu & Flavius Valentin Jakubowicz, 2023. "Bitcoin in Conventional Markets: A Study on Blockchain-Induced Reliability, Investment Slopes, Financial and Accounting Aspects," Mathematics, MDPI, vol. 11(21), pages 1-20, November.
    12. Chawla, Chetan, 2020. "Trust in blockchains: Algorithmic and organizational," Journal of Business Venturing Insights, Elsevier, vol. 14(C).
    13. Jeremy Eng‐Tuck Cheah & Thong Dao & Hung Do & Tapas Mishra, 2026. "Speed of Adjustment in Digital Assets in a Decentralized Financial World," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 46(2), pages 320-333, February.
    14. Sunghun Chung & Keongtae Kim & Chul Ho Lee & Wonseok Oh, 2023. "Interdependence between online peer‐to‐peer lending and cryptocurrency markets and its effects on financial inclusion," Production and Operations Management, Production and Operations Management Society, vol. 32(6), pages 1939-1957, June.
    15. Jing Wu & Yaoyi Cai, 2025. "The Paradox of AI Knowledge: A Blockchain-Based Approach to Decentralized Governance in Chinese New Media Industry," Future Internet, MDPI, vol. 17(10), pages 1-31, October.
    16. Haider Alvi, Farzad & Ulrich, Klaus, 2023. "Innovation finance ecosystems for entrepreneurial firms: A conceptual model and research propositions," Journal of Business Research, Elsevier, vol. 156(C).
    17. Dhillon, Rina & Sivabalan, Prabhu, 2026. "Exploring dimensions of governance for different types of blockchain systems," The British Accounting Review, Elsevier, vol. 58(2).
    18. Weichu Deng & Teng Huang & Haiyang Wang, 2022. "A Review of the Key Technology in a Blockchain Building Decentralized Trust Platform," Mathematics, MDPI, vol. 11(1), pages 1-29, December.
    19. Goodell, John W. & Yadav, Miklesh Prasad & Ruan, Junhu & Abedin, Mohammad Zoynul & Malhotra, Nidhi, 2023. "Traditional assets, digital assets and renewable energy: Investigating connectedness during COVID-19 and the Russia-Ukraine war," Finance Research Letters, Elsevier, vol. 58(PA).
    20. K Saengchote & C Castro-Iragorri, 2023. "Network Topology in Decentralized Finance," Documentos de Trabajo 20782, Universidad del Rosario.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:114338. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.