A Formalized Approach to Secure and Scalable Smart Contracts in Decentralized Finance

Abstract

The evolution of decentralized finance (DeFi) has necessitated the development of highly secure and scalable smart contract frameworks. Traditional smart contract languages often face challenges related to verification, resource consumption, and execution efficiency on blockchain networks. This paper explores a formalized approach to smart contract design, leveraging advanced type systems, higher-order functions, and resource-aware execution models to enhance security and scalability. By integrating formal verification techniques and optimizing onchain computation, this approach mitigates risks such as denial-of-service (DoS) attacks and excessive gas fees while improving interoperability across blockchain ecosystems. The study further examines the implications of these design choices for financial automation, decentralized applications, and broader enterprise adoption of blockchain technology.