Systematic Literature Review of Decentralized Finance (DeFi): Components, Opportunities, and Challenges

Abstract

This paper presents a systematic literature review on Decentralized Finance (DeFi), examining its key components, implementation challenges, and benefits to the financial sector. Using Kitchenham’s guidelines and the PRISMA framework, relevant studies from 2021 to 2025 were analyzed. Findings show that DeFi systems are built on smart contracts, decentralized exchanges, lending platforms, and stablecoin mechanisms. These enable open, programmable, and intermediary-free financial services. However, DeFi adoption faces issues such as security risks, scalability, high cost, market quality, centralization, uncertainty regulation, and complexity. Despite these challenges, DeFi offers potential advantages including greater transparency, improve efficiency and services and enhanced financial inclusion. Overall, this comprehensive review serves as a valuable resource for researchers, practitioners, and organizations seeking to understand the evolving DeFi landscape, address existing limitations, and make informed decisions regarding its adoption and development.