Blockchain for Decentralized Finance: Impact, Challenges and Remediation

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Finance: Impact, Challenges and Remediation</title> <meta name="description" content="Blockchain for Decentralized Finance: Impact, Challenges and Remediation"> <meta name="keywords" content="Advance trading, crowd funding, exchange tokens, fund aggregation, margin trading, quadratic funding, smart contracts, streaming money, token derivatives."> <meta name="viewport" content="width=device-width, initial-scale=1, minimum-scale=1, maximum-scale=1, user-scalable=no"> <meta charset="utf-8"> <meta name="citation_title" content="Blockchain for Decentralized Finance: Impact, Challenges and Remediation"> <meta name="citation_author" content="Rishabh Garg"> <meta name="citation_publication_date" content="2023/03/10"> <meta name="citation_journal_title" content="International Journal of Computer and Information Engineering"> <meta name="citation_volume" content="17"> <meta name="citation_issue" content="3"> <meta name="citation_firstpage" content="225"> <meta name="citation_lastpage" 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class="card-text"><strong>Abstract:</strong></p> <p>Blockchain technology can allow remote, untrusted parties in the banking and financial sector to reach consensus on the state of databases without the involvement of gatekeepers. Like a bookkeeper, it can manage all financial transactions including payments, settlements, fundraising, securities management, loans, credits and trade finance. It can outperform existing systems in terms of identity verification, asset transfers, peer-to-peer transfers, hedge funds, security and auditability. Blockchain-based decentralized finance (DeFi) is a new financial protocol. Being open and programmable, it enables various DeFi use-cases, including asset management, tokenization, tokenized derivatives, decentralized autonomous organizations, data analysis and valuation, payments, lending and borrowing, insurance, margin trading, prediction market, gambling and yield-farming, etc. In addition, it can ease financial transactions, cash-flow, use of programmable currency, no-loss lotteries, etc. This paper aims to assess the potential of decentralized finance by leveraging the blockchain-enabled Ethereum platform as an alternative to traditional finance. The study also aims to find out the impact of decentralized finance on prediction markets, quadratic funding and crowd-funding, together with the potential challenges and solutions associated with its implementation.</p> <iframe src="https://publications.waset.org/10013000.pdf" style="width:100%; height:400px;" frameborder="0"></iframe> <p class="card-text"><strong>Keywords:</strong> <a href="https://publications.waset.org/search?q=Advance%20trading" title="Advance trading">Advance trading</a>, <a href="https://publications.waset.org/search?q=crowd%20funding" title=" crowd funding"> crowd funding</a>, <a href="https://publications.waset.org/search?q=exchange%20tokens" title=" exchange tokens"> exchange tokens</a>, <a href="https://publications.waset.org/search?q=fund%20aggregation" title=" fund aggregation"> fund aggregation</a>, <a href="https://publications.waset.org/search?q=margin%20trading" title=" margin trading"> margin trading</a>, <a href="https://publications.waset.org/search?q=quadratic%20funding" title=" quadratic funding"> quadratic funding</a>, <a href="https://publications.waset.org/search?q=smart%20contracts" title=" smart contracts"> smart contracts</a>, <a href="https://publications.waset.org/search?q=streaming%20money" title=" streaming money"> streaming money</a>, <a href="https://publications.waset.org/search?q=token%20derivatives." title=" token derivatives."> token derivatives.</a> </p> <a href="https://publications.waset.org/10013000/blockchain-for-decentralized-finance-impact-challenges-and-remediation" class="btn btn-primary btn-sm">Procedia</a> <a href="https://publications.waset.org/10013000/apa" target="_blank" rel="nofollow" class="btn btn-primary btn-sm">APA</a> <a href="https://publications.waset.org/10013000/bibtex" target="_blank" rel="nofollow" class="btn btn-primary btn-sm">BibTeX</a> <a href="https://publications.waset.org/10013000/chicago" target="_blank" rel="nofollow" class="btn btn-primary btn-sm">Chicago</a> <a href="https://publications.waset.org/10013000/endnote" target="_blank" rel="nofollow" class="btn btn-primary btn-sm">EndNote</a> <a href="https://publications.waset.org/10013000/harvard" target="_blank" rel="nofollow" class="btn btn-primary btn-sm">Harvard</a> <a href="https://publications.waset.org/10013000/json" target="_blank" rel="nofollow" class="btn btn-primary btn-sm">JSON</a> <a href="https://publications.waset.org/10013000/mla" target="_blank" rel="nofollow" class="btn btn-primary btn-sm">MLA</a> <a href="https://publications.waset.org/10013000/ris" target="_blank" rel="nofollow" class="btn btn-primary btn-sm">RIS</a> <a href="https://publications.waset.org/10013000/xml" target="_blank" rel="nofollow" class="btn btn-primary btn-sm">XML</a> <a href="https://publications.waset.org/10013000/iso690" target="_blank" rel="nofollow" class="btn btn-primary btn-sm">ISO 690</a> <a href="https://publications.waset.org/10013000.pdf" target="_blank" class="btn btn-primary btn-sm">PDF</a> <span class="bg-info text-light px-1 py-1 float-right rounded"> Downloads <span class="badge badge-light">343</span> </span> <p class="card-text"><strong>References:</strong></p> <br>[1] Garg R, 2021. Ethereum based Smart Contracts for Trade and Finance. International Journal of Economics and Management Engineering, 11(16): 619-629. <br>[2] Garg R, 2022. Distributed Ecosystem for Identity Management. Journal of Blockchain Research, 1(1): 51-63. <br>[3] Garg R, 2023. Blockchain for Real World Applications. John Wiley & Sons Inc. New Jersey, US, 01-416. <br>[4] Augur, 2022: https://www.kraken.com <br>[5] Binance, 2019. https://www.binance.com <br>[6] Chen PW, Jiang BS, and Wang CH, 2017. Blockchain-based payment collection supervision system using pervasive Bitcoin digital wallet. In Proceedings of the IEEE 13th International Conference on Wireless and Mobile Computing, Networking and Communications, Rome Italy, 139-146. <br>[7] Mills D, Wang K, Malone B, Ravi A, Marquardt J, Chen C, Badev A, Brezinski T, Fahy L, and Liao K, 2016. Distributed Ledger Technology in Payments, Clearing, and Settlement. Finance and Economics Discussion Series. <br>[8] Irwin AS and Turner AB, 2018. Illicit Bitcoin transactions: Challenges in getting to who, what, when and where. Journal of Money Laundering Control, 21: 297-313. <br>[9] Stefan C, 2018. Tales from the crypt: Might cryptocurrencies spell the death of traditional money? A quantitative analysis. In Proceedings of the International Conference on Business Excellence, Bucharest, Romania, 12: 918-930. <br>[10] Park JH, 2017. Blockchain Security in Cloud Computing: Use Cases, Challenges, and Solutions. Symmetry, 9: 164. <br>[11] Del Rio CA, 2017. Use of distributed ledger technology by central banks: A review. Enfoque Ute, 8: 1–13. <br>[12] Lin T, Yang Xu, Wang T, Peng T, Xu F, Lao S, Ma S, Wang H, and Hao, W, 2020. Implementation of High-Performance Blockchain Network Based on Cross-Chain Technology for IoT Applications. 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Blockchain for Decentralized Finance: Impact, Challenges and Remediation