DeFi Ecosystem for Future Application of Renewable Energy Trading and Smart Energy Loans Through Development of IoT for Smart Digital Economy

Abstract

This chapter investigates the emerging integration of decentralized finance (DeFi) ecosystems and the Internet of Things (IoT) as a transformative pathway for developing inclusive and sustainable renewable energy markets. In an ideal digital energy economy, real-time data intelligence, transparent financial mechanisms, and decentralized governance structures function cohesively to ensure equitable access, operational efficiency, and long-term sustainability. Such a system envisions seamless peer-to-peer energy trading, automated financing, and adaptive grid management. In practice, however, existing energy infrastructures remain constrained by centralized financing, limited data interoperability, and fragmented technological adoption, which restrict scalability and social inclusion. Prior research on blockchain-based energy trading, smart grids, and IoT-enabled monitoring emphasizes efficiency gains and transparency in distributed energy systems. Parallel studies on DeFi highlight its potential to democratize capital access and automate financial processes 234through smart contracts. Yet, these streams largely operate independently, offering limited insight into their integrated sociotechnical and financial impacts. Moreover, ethical governance, data security, and cross-platform interoperability remain underexplored. Addressing these gaps, this chapter proposes an integrative conceptual framework grounded in digital ecosystem theory and decentralized governance principles. Through analytical synthesis, it demonstrates how IoT-driven energy data, blockchain-enabled smart contracts, and decentralized lending models can jointly enhance grid stability, financing inclusivity, and system trust. The findings provide strategic guidance for advancing resilient, ethical, and scalable smart energy economies.