Decentralized autonomous organizations (DAOs) represent a novel technology progress that could potentially challenge conventional organizations in terms of management and making choices. This chapter provides an introduction to decentralized finance (DeFi), situates DeFi within the framework of the conventional financial industry, establishes a connection of peer-to-peer transactions, and concludes with a discussion on policy implications. Decentralization has the capacity to weaken conventional mechanisms of accountability and diminish the efficacy of established financial regulations and enforcement. This study presents a thorough analysis of the current status of research on DAOs, highlighting the most important research areas and relevant works in the subject. Furthermore, it examines the performance of prominent decentralized finance in relation to these research areas, providing valuable observations on their real-world implementations and efficacy.
Top1. Introduction
Decentralized finance, also known as DeFi, provides financial services, including credit, loans, and investing, directly on the blockchain without the need for a typical central commercial middleman (Werner et.,2021). DeFi applications aim to achieve disengagement and censoring resistance, demonstrating some degree of success (Carter et al., 2021).Open-source software is commonly used to implement these systems, which allow various stakeholders to take part in the decisions being made (Jensen et al.,2021). Intermediaries frequently fulfill crucial functions in diminishing transaction expenses and broadening transaction opportunities. Mediators frequently facilitate financial interactions by connecting transactional parties, fostering confidence, and facilitating deal settlements (Roth, 2015). In the absence of intermediaries, transacting parties may encounter difficulties in establishing contacts, engaging in contract negotiations, and enforcing agreements. However, intermediaries frequently possess significant influence in structuring economic transactions, and they can exploit this influence to maximize their own interests, which raises worries about their monopoly status (Cohen et al., 2021). Despite being a global leader, the Indian financial industry faces challenges in its long-term development. (Goyal et al.,2019).The introduction of technology has brought about a significant transformation in the way financial services are planned, created, and utilized. Utilizing the technology of blockchain, decentralised financial services can expand financial accessibility, provide unrestricted access, foster innovation without requiring permission, and generate fresh prospects for investors and researchers. The finance industry is currently seeing a significant shift with the rise of decentralized financial institutions (DeFi). DeFi, based on the concept of blockchain, seeks to transform conventional financial systems by providing clear, accessible, and self-sufficient options to individuals worldwide. The incorporation of artificial intelligence (AI) in the fast changing environment has the capacity to unlock unparalleled prospects and redefine the prospects of finance in a decentralized manner. Artificial intelligence (AI), through its capacity to examine extensive quantities of information, detect trends, and generate smart forecasts, has the potential to enable decentralized finance (DeFi) systems to improve their activities, strengthen safety precautions, and offer customized solutions for customers. The uses of AI in DeFi are extensive and full of potential, ranging from artificially intelligent trading techniques and risk evaluation tools to fraud detection techniques and smart contracts audits.
However, the probable future expansion of DeFi is uncertain, as it is yet to be determined whether or not and to how much it will occur (Bank for International Settlements (BIS, 2022). The introduction of DeFi brings about significant technical and economic intricacy, which renders the understanding, assessments, and risk estimation of DeFi financial offerings progressively challenging. Financial firms and authorities handling DeFi (e.g., Aramonte et al., 2021 & Financial Stability Board, 2022) require a methodical assessment of these factors. There is a significant dearth of comprehensive information about DeFi among numerous groups, highlighting the need for a unique framework to enhance comprehension of the technology. The objective of this study is to offer a bibliometric analysis is “To know the key dimensions of DeFi, its evolution in the academic literature alongwith its financial capacities”. Furthermore, we incorporate the latest discoveries and progressions that enhance comprehension of their operation, structure, and their ability to work together.