Assessment of the Potential of Decentralized Dinance (DeFi) as an Alternative to Traditional Financial Services in the Context of the Development of the Digital Economy and Web3

Abstract

The article explores the conception of decentralized finance (DeFi) as one of the key innovations of the modern digital economy, which has the potential to fundamentally change traditional approaches to providing financial services. An analysis of the main characteristics of DeFi protocols, their functional capabilities, and differences from centralized financial institutions has been conducted. Particular attention is paid to the analysis of such advantages of DeFi as open access to financial products, transaction transparency, process automation based on smart contracts, and the reduction of dependence on centralized intermediaries. At the same time, key issues in the development of DeFi have been outlined, including high technological complexity, regulatory uncertainty, financial volatility of assets, and risks associated with the vulnerability of smart contracts. The article emphasizes the need to create tools for a comprehensive assessment of the investment potential of DeFi protocols, as traditional analysis methods, which are primarily based on profitability or liquidity indicators, do not fully reflect the specifics of decentralized systems. In response to this issue, the conception of a multifactor indicator DIAD (DeFi Investment Attractiveness Dashboard) has been proposed, which allows for the integration of the assessment of financial parameters (return, volatility, liquidity), institutional characteristics (level of governance decentralization), and behavioral variables (user activity) into a single model. The developed methodology enables objective cross-platform comparison of various DeFi protocols, which is crucial for making informed investment decisions in the high-risk environment of digital assets. The article forms the theoretical basis for further empirical research on the efficiency of decentralized platforms, the development of risk management strategies in the DeFi sector, as well as the advancement of regulatory initiatives aimed at ensuring the resilience of the new financial ecosystem in the Web3 environment. The obtained results are of practical significance for investors, developers of decentralized applications, and regulatory bodies working on the integration of innovative financial technologies into the global economy.