Blockchain-Driven Decentralized Finance (DeFi): Transforming the Architecture of Traditional Financial Ecosystems

Abstract

Blockchain and Decentralized Finance (DeFi) are transforming the financial world by redefining how financial transactions and services operate. This paper explores the convergence of these technologies, emphasizing their potential to disintermediate traditional banking, enhance financial inclusivity, and increase transparency and efficiency. While these innovations hold significant promise, they are also met with challenges, including regulatory uncertainty, security vulnerabilities, and technological limitations. This study analyzes the underlying technologies, key platforms, and comparative frameworks that highlight how DeFi is challenging conventional financial systems, while suggesting avenues for sustainable adoption and global impact