SHS Web Conf.
Volume 129, 2021The 21st International Scientific Conference Globalization and its Socio-Economic Consequences 2021
|Number of page(s)||8|
|Section||Financial Management and Financial Markets|
|Published online||16 December 2021|
University of Zilina, Faculty of Operation and Economics of Transport and Communications, Department of Economics, Univerzitna 1, 010 26 Zilina, Slovakia
* Corresponding author: email@example.com
Research background: Its simplest form, decentralized finance is a system by which financial products become available on a public decentralized blockchain network, making them open to anyone to use, rather than going through middlemen like banks or brokerages. Unlike a bank or brokerage account, a government-issued ID, Social Security number, or proof of address are not necessary to use DeFi.
Purpose of the article: The aim of the contribution is more specifically, DeFi refers to a system by which software written on blockchains makes it possible for buyers, sellers, lenders, and borrowers to interact peer to peer or with a strictly software-based middleman rather than a company or institution facilitating a transaction.
Methods: Multiple technologies and protocols are used to achieve the goal of decentralization. For example, a decentralized system can consist of a mix of open-source technologies, blockchain, and proprietary software. Smart contracts that automate agreement terms between buyers and sellers or lenders and borrowers make these financial products possible. Regardless of the technology or platform used, DeFi systems are designed to remove intermediaries between transacting parties.
Findings & Value added: The article provides an overview of decentralized finance (DeFi) solutions that have already proved they are better alternatives to traditional finance. With DeFi, users can take advantage of lower transaction rates, higher interest rates or an opportunity to diversify investments.
Key words: decentralized finance; / financial products; / blockchain; / globalization
© The Authors, published by EDP Sciences, 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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