Opportunities and potential risks of the DeFi ecosystem

Abstract

The prospects for the widespread introduction of decentralized finance into global financial markets are analyzed. The aim of the study is to consider the opportunities provided to users and investors by the DeFi ecosystem (decentralized finance), and the potential risks of implementing services, applications, protocols based on decentralized financial instruments in both foreign and Russian financial markets. With the help of the theoretical (analysis, synthesis, abstraction) and empirical (comparison, observation) research methods, opinions of leading domestic and foreign experts on the innovative capabilities of DeFi are presented. Based on up-to-date statistical data from the innovative dApps – DappRadar platform, analytical reviews, conference reports, public speeches and expert interviews, initiatives of the main financial regulator of the United States – The United States Securities and Exchange Commission (The United States Securities and Exchange Commission), the Commodity Futures Trading Commission (CFTC), and the Russian Financial Action Task Force (FATF) group for the development of financial measures to combat money laundering, the author emphasizes the need to implement a regulatory framework to settle the spread of decentralized finance. The resulting conclusions are the inclusion of digital assets in the “anti-money laundering” legislation of Russia, as well as a number of other measures aimed at bringing regulatory clarity to the sphere of DeFi initiatives. The main conclusion of the study highlights the difficulties in the large-scale spread of decentralized finance, which is justified by the direct impact of potential risks of using it, distributed by the author to a number of system groups. As a promising predictive model for the development of DeFi, the author proposes a safe harbor model for tokens developed by Hester Peirce. The relevance and scientific novelty of the research are justified by the possibility of using the achieved results (including in the field of analyzing initiatives recommended by large regulatory institutions in relation to uncontrolled financial markets) to introduce a transparent, open, reliable ecosystem of decentralized finance.