The article examines financial monitoring in the field of virtual asset circulation, including cryptocurrencies, tokenized assets, and decentralized financial platforms. The rapid expansion of the virtual asset market creates new economic opportunities while simultaneously generating heightened risks related to money laundering, terrorist financing, and sanctions evasion, which necessitates effective regulatory and supervisory responses. Problem statement. The core problem lies in the insufficient alignment of national financial monitoring mechanisms for virtual assets with international FATF standards and European regulatory approaches, as well as the fragmented enforcement practices in Ukraine amid the rapid evolution of the crypto market. Unresolved aspects. Despite ongoing regulatory efforts, significant gaps remain in the effective implementation of FATF Recommendation 15, the operationalization of the Travel Rule, coordination among national supervisory authorities, and oversight of decentralized finance services and cross-border virtual asset transactions. Purpose of the article. The purpose of the study is to conduct a comprehensive analysis of international financial monitoring standards applicable to virtual assets, assess current money laundering and terrorist financing risks, and substantiate directions for improving Ukraine’s regulatory framework in line with FATF requirements and EU practices. Main content. The article analyzes the legal nature of virtual assets, FATF requirements for Virtual Asset Service Providers (VASPs), the application of the Travel Rule, and empirical data on illicit crypto transactions based on Chainalysis reports. Particular attention is paid to the European regulatory model established by the Markets in Crypto-Assets Regulation (MiCA), as well as to the comparative analysis of the concepts of VASP and Crypto-Asset Service Provider (CASP). The current state of legal regulation and financial monitoring of virtual assets in Ukraine is also assessed. Conclusions. The study demonstrates that effective financial monitoring of virtual assets can be achieved only through a comprehensive approach combining FATF international standards, harmonization with EU law, advanced analytical technologies, and strengthened institutional capacity of national regulators. The practical value of the research lies in developing recommendations aimed at enhancing Ukraine’s financial security and reducing money laundering and terrorist financing risks in the virtual asset market.
Conglomerates are among the most complex organizational forms in capitalism. They own multiple businesses, often across different industries, geographies, operating models, and risk profiles. Some conglomerates own insurance companies, manufacturers, railroads, energy utilities, retailers, banks, technology firms, industrial businesses, media assets, and consumer brands under one corporate umbrella. The central challenge is not only how to operate these businesses, but how to allocate capital among them. A conglomerate must answer a difficult question: Who decides where the money goes? Should capital allocation be centralized at head office, where senior executives and finance committees compare business units and approve investments? Or should capital decisions be decentralized, allowing subsidiary managers to operate autonomously while headquarters focuses only on major capital deployment? Should internal cash flows remain inside business units, or should they be swept to corporate headquarters and redeployed across the group? Should acquisitions be initiated by subsidiaries, by corporate development teams, or by the CEO? Should capital budgeting follow rigid committee processes or owner-oriented judgment? These questions define the capital allocation architecture of the conglomerate. Berkshire Hathaway represents one of the most successful decentralized conglomerate models in modern business history. Warren Buffett and Charlie Munger built Berkshire around autonomy, trust, permanent ownership, strong subsidiary managers, and centralized capital allocation at the highest level. Berkshire’s headquarters remains small, and its operating subsidiaries are largely left alone. Yet the most important capital allocation decisions—large acquisitions, major equity investments, cash deployment, and insurance float allocation—have historically been handled centrally by Buffett and, increasingly, Berkshire’s designated capital allocation successors. By contrast, many corporations use centralized capital committees. These structures often include formal budgeting processes, investment review boards, hurdle rates, discounted cash flow models, divisional competition for capital, strategic planning cycles, and executive approval layers. Centralization can improve control, risk management, consistency, and capital discipline. However, it can also create bureaucracy, slow decisions, distort incentives, and separate capital decision-makers from operating reality. This chapter compares decentralized and centralized capital allocation models in conglomerates. It argues that neither model is universally superior. The right model depends on business quality, management trust, governance, capital intensity, complexity, regulatory risk, and the competence of headquarters. However, the Berkshire model demonstrates a powerful lesson: decentralization can compound value when paired with exceptional managerial selection, strong culture, conservative financing, and disciplined central capital allocation.
Blockchain technology and decentralised finance (DeFi) are reshaping financial services by eliminating intermediaries, automating transactions through smart contracts, and expanding global access to capital. Initially designed for cryptocurrencies, blockchain has evolved into a transformative ecosystem that optimises resource management and democratises finance. This study explores the impact of blockchain and DeFi on financial services, focusing on adoption opportunities and challenges. It addresses key gaps in the literature, particularly platform interoperability, security in decentralised environments, and adoption in emerging markets. Using the PRISMA 2020 methodology, the research ensures a rigorous selection and critical evaluation of scientific articles to identify trends, barriers, and potential developments. Findings indicate that blockchain and DeFi can enhance financial inclusion, improve transparency, and strengthen decentralisation. However, they also present challenges such as regulatory uncertainty, technical complexity, and security risks. Overcoming these obstacles requires innovative solutions and strategic collaboration among governments, financial institutions, and technology developers. By shedding light on these dynamics, the study contributes to a deeper understanding of how blockchain and DeFi can reshape financial services, paving the way for a more inclusive, efficient, and secure financial ecosystem.
This article reviews how blockchain-native finance is reshaping financial intermediation and how the next wave of digital finance is likely to be influenced by large language models (LLMs) and quantum finance research. Building on recent work on decentralized finance, blockchain implementation, supply chain finance, and emerging FinTech architectures, the study develops an integrated analytical framework that connects three layers of change: programmable settlement, intelligent decision support, and frontier computational finance. Rather than treating DeFi, blockchain-based supply chain finance, LLM applications, and quantum finance as isolated topics, the review shows that they form a continuous innovation trajectory with shared challenges in governance, interoperability, data quality, risk modeling, and institutional trust. The paper synthesizes prior findings, compares major technical and managerial mechanisms, and proposes a research agenda for resilient, explainable, and regulation-aware financial innovation. The results suggest that blockchain creates a credible record and execution layer, LLMs expand interpretive and operational intelligence, and quantum finance may eventually widen the solution space for complex risk-pricing and portfolio problems. The article concludes with practical implications for platform designers, regulators, and industry managers.
State payment systems today play a central role in accelerating economic transactions, ensuring transparency in budget fund movements, and digitizing financial services provided to citizens. From this perspective, DeFi – decentralized finance—emerged as a new architecture compared to traditional banking infrastructure and belongs to the category of technological solutions applicable in state payment systems. The core idea of DeFi is to replace intermediaries with code, automate transactions through smart contracts, and operate on open blockchain infrastructure.[1]..
Federated learning represents a paradigm shift in distributed machine learning by enabling collaborative model training across decentralized nodes while maintaining data privacy at source locations. It helps bridge the gap between artificial intelligence-driven development guidelines and the regulatory mandates laid down by data protection legislation. A decentralized architecture transmits only the model updates to aggregation servers; this reduces privacy breach exposure and compliance violation risks and also eliminates raw data centralization. Federated learning helps build production-ready systems across healthcare, finance, and edge computing environments, owing to the maturities that have occurred in cloud infrastructure. This is a transition from the erstwhile theoretical frameworks it used to have. Architectural advantages are supplemented by privacy-preserving mechanisms like differential privacy and secure aggregation protocols, which facilitate organizations to leverage collective intelligence without exposing sensitive information. Robust platforms for privacy-critical applications can be synthesized by the integration of cloud-native security services, cryptographic enhancements, and edge computing optimization. Courtesy of emerging solutions that cater to model fairness, communication efficiency, and data heterogeneity, federated learning's practical applicability across diverse organizational contexts and regulatory domains continues to advance.
Jean-Claude Baraka Munyaka, Olivier Gallay, Edward Mutandwa, Lolemtum Joseph Timu · 8 authors
Climate change continues to undermine agricultural productivity and livelihoods in sub-Saharan Africa, where smallholder, rain-fed systems predominate. Kenya and Zimbabwe, representing contrasting decentralized and centralized adaptation systems, provide insights into how institutional design shapes agricultural resilience. This study conducts a comparative institutional analysis of climate change adaptation across four dimensions: land tenure, governance structures, access to inputs and resources, and community-based support. Using a systematic literature review (2000–2025), bibliometric mapping, and a Composite Institutional Adaptation Index (CIAI), the analysis examines how policies and local institutions interact to shape adaptive capacity. Findings indicate that Kenya's devolved governance facilitates local innovation through County Climate Change Funds, while Zimbabwe's centralized approach promotes policy coherence but constrains local autonomy. In both contexts, tenure security, equitable input access, and integration of cooperatives, traditional leaders, and women's groups emerge as critical determinants of resilience. The study situates these findings within debates on adaptation finance and governance, including Locally Led Adaptation, Green Climate Fund support, and CAADP implementation. It concludes that effective climate adaptation requires multi-scalar governance systems that integrate formal and informal institutions, align finance with local priorities, and embed learning within agricultural policy.
Ziqiao Kong, Wanxu Xia, Chong Wang, Yi LU · 9 authors
Smart contracts govern billions of dollars in decentralized finance (DeFi), yet automated vulnerability detection remains challenging because many vulnerabilities are tightly coupled with project-specific business logic. We observe that recurring vulnerabilities across diverse DeFi business models often share the same underlying economic mechanisms, which we term DeFi semantics, and that capturing these shared abstractions can enable more systematic auditing. Building on this insight, we propose Knowdit, a knowledge-driven, agentic workflow for smart contract vulnerability detection. Knowdit first constructs an auditing knowledge graph from historical human audit reports, linking fine-grained DeFi semantics with recurring vulnerability patterns. Given a new project, a multi-agent pipeline leverages this knowledge through an iterative loop of specification generation, Proof-of-Concept (PoC) synthesis, PoC execution, and finding reflection, driven by a shared repository index. We evaluate Knowdit on 11 recent Code4rena projects with 84 ground-truth vulnerabilities. Knowdit detects all 21 high-severity and 90% of medium-severity vulnerabilities without false positives, fully covering eight projects, significantly outperforming all baselines. Applied to seven real-world projects, Knowdit further discovers 9 high- and 36 medium-severity previously unknown vulnerabilities, securing millions in liquidity and proving its outstanding performance.
Ezinne Victory Kanu, Charles Chibuisi Ehiemere, Ishaku Adamu Akyala, Eric Terkuma Chia · 5 authors
Despite global commitments under SDG-3, maternal mortality rates remain disproportionately high in Sub-Saharan Africa. This review examines how health policies have shaped outcomes between 2014 and 2024 in Nigeria, Rwanda, South Africa, and Gabon. A comparative narrative review was conducted using WHO, World Bank, UNFPA, DHS, and national policy documents. Guided by the Walt & Gilson Policy Triangle and the WHO Health System Building Blocks, policies were assessed for context, content, actors, process, and health system capacity. Data were synthesized thematically to compare implementation and outcomes. Rwanda achieved substantial declines through decentralized financing, performance-based funding, and community health worker integration. South Africa reduced deaths via integration of HIV and maternal services but still faces equity gaps. Gabon improved financial access but rural infrastructure and workforce limitations constrain outcomes. Nigeria’s fragmented governance and weak PHC financing explain stagnation despite multiple reforms. Implementation quality, not policy presence, drives progress. Strengthening governance, financing transparency, workforce readiness, and community engagement remains crucial for achieving SDG-3. This study highlights cross-country lessons transferable to similar contexts.
This study examines the theoretical contributions of Masayasu Narumi, who served as a policy advisor to Mayor Ichio Asukata of Yokohama. He formulated influential ideas on local autonomy and local public finance. Despite his central role in shaping the theory of reformist local governments,Narumi’s theoretical contributions have not been sufficiently clarified. His work is characterized by its practical orientation, grounded in municipal reform and citizen participation, as well as its historical consciousness in addressing challenges and prospects for local governance. In the context of the 1980s “era of local autonomy,” when the essence of progressive local governments was under critical scrutiny, Narumi advanced a new paradigm such as a “policy-making government” or “citizens’ government.” In his theory of local public finance, Narumi conceptualized local autonomy and local public finance as integrated activities. He argued that the realization of reform and policy within a“ citizens’ government” required a decentralized administrative and fiscal structure between the central and local governments. His formulation of a“ decentralization-oriented fiscal theory” anticipated later debates on local choice and fiscal responsibility. As contemporary Japan again confronts the necessity of municipal reform, Narumi’s pioneering insights into participation, decentralization, and autonomy warrant renewed scholarly attention.
Nepal?s federal transition has shifted major responsibilities for basic and secondary education to local governments, including rural municipalities. This paper examines how they are using this mandate and what it implies for education equity. Using qualitative analysis of constitutional and legal texts, national sector plans, and municipal education policies and budgets, it focuses on three domains: governance capacity, fiscal capacity, and the alignment of policy and practice. Rural Municipalities (RMs) are beginning to institutionalize their role through education sections, local acts and annual plans, and, in some cases, substantial budget allocations to education. However, legal ambiguities, reliance on earmarked federal grants, limited administrative capacity and politicized teacher management restrict their room for maneuver. These constraints create a gap between rights-based commitments and everyday schooling, especially for disadvantaged children in remote areas, and highlight the need for clearer roles, stronger local capacity and more equitable, flexible financing and accountability.
This paper explores the relationship between fiscal decentralization, green finance, and the digital economy in driving sustainable development, using a balanced cross-country panel dataset spanning 2014–2022, for 29 European countries. Employing dynamic panel estimation techniques, including system generalized method of moments (GMM), the research investigates how fiscal decentralization, green finance, and the digital economy (each of them individually and through interaction mechanisms), dynamically shape sustainable development performance in the presence of endogeneity and temporal persistence. The findings reveal strong inertia in sustainable development, which depends on its previous level. Fiscal decentralization has complex effects: revenue autonomy supports sustainability, whereas expenditure autonomy may undermine it, suggesting differences in how resources are used efficiently at the local versus central levels. Digitalization acts as a catalyst, boosting the effectiveness of environmental taxes and enhancing local spending outcomes. However, if fiscal administrations are not digitally integrated, digitalization may weaken the benefits of decentralized revenues. This study advances the literature by integrating fiscal, financial, and digital views, providing new insights into policy coordination.
Decentralized Finance (DeFi) operating in Benin are essential for financing the agricultural sector and for achieving the Sustainable Development Goals. This research contributes to the debate on the effectiveness of agricultural financing models proposed by DeFi in Northern Benin. Two theoretical approaches are mobilized to assess farmers’ perceptions : Triandis’ interpersonal behaviour model (1979) and the balanced incomplete block design method for analyzing farmers’ choices. A total of 585 farmers were surveyed, including 385 financing beneficiaries, using purposive sampling. Data were analyzed with R version 4.3.0 and RStudio version 2022.02.0. The results highlight a preference for individual financing models (61.26%) over group-based models (38,74%), as they better meet the immediate needs of farmers. Regarding the impact of financing models on agricultural factors of production, farmers acknowledge the positive effect of individual financing on the purchase of inputs and equipment, but criticize the inability of group financing models to stimulate overall productivity and land expansion. The overall perception of support systems implemented after financing is negative, as they remain disconnected from farmer’s real needs. It therefore appears that while financing models satisfy beneficiaries in terms of immediate operational aspects (inputs, equipment, financial needs), and they fail to address structural expectations such as productivity growth and farmland expansion
The amount of international capital invested in sustainability-focused investments and decentralized financial technologies has been growing fast. Thus, this research focuses on the transmission of volatility and optimal portfolio composition among decentralized finance (DeFi) assets, S&P renewable energy and technology market indices, and conventional energy commodities for the period from March 15, 2018, to August 30, 2024. The sample period was divided into three sub-periods to examine the impact of COVID-19, which increased in parallel with the adoption of DeFi and a focus on sustainability: pre-COVID, during-COVID, and post-COVID. This research utilizes the Diebold-Yilmaz and Baruník-Křehlík techniques for time-and frequency-domain analyses, and the Dynamic Conditional Correlation model for portfolio optimization. First, the findings reveal that DeFi tokens (sustainable markets) (brown investments) display moderate (high) (very low) internal connectedness. Second, DeFi tokens demonstrate very low volatility connectedness with both sustainable and brown markets, which suggests strong diversification effects. Third, volatility connectedness among sustainable markets and conventional energy commodities is equally low. Fourth, sustainable markets (conventional energy commodities) make the highest (lowest) contribution to total volatility connectedness, and they operate as net transmitters (receivers) of volatility. Moreover, the total volatility connectedness is 33.7%, which is relatively low, suggesting significant opportunities for diversification of investment portfolios. Furthermore, the outcomes for optimal portfolio weights present greater allocations to green markets compared to conventional energy commodities and DeFi assets, revealing an escalating global transition toward sustainability. Additionally, COVID-19 significantly influenced volatility transmissions and portfolio allocations.
<div> Large Language Models (LLMs) are transforming 1 blockchain security and analytics, yet a system-2 atic evaluation of their capabilities remains limited. 3 This survey provides a comprehensive, AI-centric 4 assessment of LLM-based methods across over 70 5 recent studies spanning 11 application domains, 6 such as security auditing, transaction fraud de-7 tection, and cryptocurrency portfolio management. 8 Our unified taxonomy standardizes task formula-9 tions and evaluation practices to enable a com-10 parison of six LLM roles across domains. For 11 each domain, we review input representations tai-12 lored to blockchain data; LLM architectures, learn-13 ing and inference paradigms, e.g., fine-tuning, 14 retrieval-augmented generation, and agentic strate-15 gies. Our review analyzes the strengths, limita-16 tions, and emerging patterns of LLM roles observed 17 in current systems. Finally, we provide practi-18 cal guidance for selecting LLMs for specific roles 19 and outline promising research directions. The on-20 line resources of this survey are available on https: 21 //llmblockchain.github.io/LLMBlockchain/. 22 1 Introduction 23 Large Language Models are increasingly incorporated into 24 blockchain systems for both security and financial analyt-25 ics, including smart contract auditing, transaction monitoring, 26 fraud detection, market analysis, and decentralized finance 27 </div>
Antonio Roberto Xavier, GILSON ADÃO DOMINGOS VIEIRA, Fidel Cambundo Sanuca, Edmilson Alberto Matamba · 8 authors
The main objective of this work is to investigate the level of cooperation, decentralization, and dialogue that exists between municipalities due to the federal pact. The 1988 Federal Constitution established the federal pact with a peculiarity: the so-called triune federalism, which recognizes the existence of three federative entities: the Union, the states, and the municipalities. Municipalities possess their own political, administrative, and financial competencies, but this decentralization also entails serious problems. Municipalities are autonomous, but many of them do not produce enough to sustain and develop themselves, and often municipal, state, and federal responsibilities are confused with the implementation of the National Education System. By the end of 2025, this scenario had changed, with the creation of a clear document outlining what each entity should do. This was linked to the new Fund for the Maintenance and Development of Basic Education and the Enhancement of Education Professionals, officially made permanent in 2020, and the mass participation in Education Development Arrangements and municipal public consortia, which led to a significant improvement in the Basic Education Development Index of several municipalities. From a methodological point of view, a Bibliographic and Documentary Review was used, this being a quantitative-qualitative research, of a basic nature and of a theoretical genre. The main results show that cooperation between municipalities is indispensable for public policies to take place and achieve their objectives based on the federative pact, since, as demonstrated; many municipalities have improved in development, especially regarding economies of scale applied to education.
P. A. Adeoye, Joseph Babatola Ayodele, Fomonyuy Shinyuy, Clement Dossou-Yovo · 6 authors
Nigeria faces one of Sub-Saharan Africa’s most severe energy poverty crises, with over 85 million people lacking electricity access, a challenge that disproportionately affects more than 2.5 million Internally Displaced Persons (IDPs) in conflict-affected North-East Nigeria. Despite national electrification efforts, humanitarian settlements remain largely excluded from reliable power infrastructure. This study evaluates the technical feasibility, spatial energy gaps, and policy barriers associated with deploying decentralized solar and hybrid solar–wind systems in IDP settlements across six North-Eastern states. A mixed-method geospatial framework was applied, integrating Visible Infrared Imaging Radiometer Suite (VIIRS) nighttime light data, Geo-Referenced Infrastructure and Demographic Data for Development (GRID&lt;sup&gt;3&lt;/sup&gt;) infrastructure datasets, and Distributed Renewable Energy (DRE) demand data using Python and Quantum Geographic Information System (QGIS). Nighttime light intensity was classified into no-access (≤100 nW/cm²/sr), limited-access (101–1000 nW/cm²/sr), and full-access (&gt;1000 nW/cm²/sr) categories. Results identified 670 IDP camps across 112 Local Government Areas (LGAs), with high concentrations in Bauchi (264 camps), Borno (194), and Gombe (140), predominantly located within limited-access zones. Solar resource assessment shows strong regional potential (4.2–4.6 kWh/m²/day Global Horizontal Irradiation (GHI)), while average wind speeds of 2–4 m/s support small-scale hybrid applications. A representative camp load analysis (3.72 kWh/day) demonstrates that a 0.99 kWp solar array combined with a 3.2 kWh battery and a 300 W vertical-axis wind turbine can reliably meet basic household energy needs, reducing approximately 25.88 kgCO&lt;sub&gt;2&lt;/sub&gt;e per household annually. Key barriers include high upfront costs, limited financing mechanisms, weak humanitarian energy policy integration, and security-related operational risks. The study provides empirical evidence for integrating decentralized renewable energy into national electrification strategies through risk-informed planning and tailored financing models to enhance resilience, sustainability, and dignity in displacement settings.
Decentralized finance introduces new business models and use cases as part of digital finance. Restaking has recently emerged as a transformative mechanism in DeFi, promising extra yields but introducing complex and interconnected risks. The paper monitors the current restaking landscape, empirically analyzes the revenue drivers of a liquid restaking protocol, and conducts a technical investigation on the emitted risk arising from the interconnection between liquid restaking and other protocols. The revenue dynamics of Renzo Protocol are analyzed by employing an OLS regression model, Granger-causality and random forest feature importance tests. Our results identify that revenue is primarily predicted by the value locked in the underlying EigenLayer ecosystem, the yield of Renzo protocol's liquid restaking token and the multi-blockchain expansion of that token. The multi-blockchain expansion of the liquid restaking token presents a double-edged sword: bridging to other networks is crucial for user adoption, but it adds the bridge risks to the existing risks of restaking. We investigate the cross-contamination risk between different DeFi services and the liquid restaking protocol. By mapping the asset flow across the decentralized finance ecosystem, it is detected that the bridge risk of the current size of Renzo's liquid-restaking assets does not impose a systemic risk on the current restaking and staking ecosystem. To address the potential consequences of the emphasized interconnection risks, we introduce two hypothetical scenarios and a stress test, assuming a large number of compromised liquid restaking tokens and a smart contract logic failure in a DeFi protocol. Considering the overall liquid-restaking protocols and the growing interconnection, this analysis requires further work to explore the growing complexities.
Reputation systems are fundamental to fostering trust and cooperation in digital environments, yet existing solutions often struggle with centralization, vulnerability to manipulation, and limited portability. Centralized reputation platforms can be opaque, censored and susceptible to become single points of failure, while decentralized ones face challenges, such as Sybil attacks, malicious strategies (e.g., ballot stuffing, bad-mouthing) exercised by entities of high influence, i.e. "whales", and privacy concerns. This paper addresses these persistent issues by proposing a blockchain-based reputation framework that integrates robust identity verification, square root voting constraints, and dynamic stake-based incentives. Rating power is linked to the reputation of the rater that puts its reputation at stake. The model aims to ensure that reputation is earned and maintained through verifiable, community-aligned actions, while simultaneously limiting the potential for abuse by malicious actors or disproportionately influential participants. By leveraging decentralized identifiers, zero-knowledge proofs, and transparent incentive mechanisms, the proposed system seeks to balance transparency, fairness, and privacy. Extensive simulation experiments prove that the approach is effective to reveal the true quality of entities, even in presence of 49% colluding voters. The approach is designed to be adaptable across diverse domains, ranging from marketplaces and collaborative platforms to decentralized finance and governance.
Smart contracts have transformed decentralized finance, but flaws in their logic still create major security threats. Most existing vulnerability detection techniques focus on well-supported languages like Solidity, while low-resource counterparts such as Vyper remain largely underexplored due to scarce analysis tools and limited labeled datasets. Training a robust detection model directly on Vyper is particularly challenging, as collecting sufficiently large and diverse Vyper training datasets is difficult in practice. To address this gap, we introduce Sol2Vy, a novel framework that enables cross-language knowledge transfer from Solidity to Vyper, allowing vulnerability detection on Vyper using models trained exclusively on Solidity. This approach eliminates the need for extensive labeled Vyper datasets typically required to build a robust vulnerability detection model. We implement and evaluate Sol2Vy on various critical vulnerability types, including reentrancy, weak randomness, and unchecked transfer. Experimental results show that Sol2Vy, despite being trained exclusively on Solidity, achieves strong detection performance on Vyper contracts and significantly outperforms prior state-of-the-art methods.
The emergence of decentralized finance (DeFi) has prompted a new, highly interwoven financial system in which the stability of the financial system is fundamentally dependent upon the existence of digital assets, in particular stablecoins, that serve as both a method of conducting transactions, collateral, and a source of liquidity. Although DeFi is said to be efficient, programmable, and disintermediated, the structural complexity and composability of the DeFi system also create new systemic- risk channels that are similar to the impact of fragilities in conventional finance (Auer et al., 2024; Xu et al., 2024). The role of stablecoins in this architecture is to facilitate trading, leverage, and settlement of protocols, though the design and collateralization process puts them at risk of derailing the stablecoin and liquidity shocks and runs (Catalini et al., 2022; Hoang and Baur, 2024). These dynamics are similar to traditional bank run and liquidity crisis theories, in which the lack of coordination and redemption could cause damaging withdrawal effects (Diamond and Dybvig, 1983; Bernardo and Welch, 2004). In the case of the elements of DeFi, the volatility can spread very quickly between lending pools, automated market makers, and cross-chain bridges, facilitating the transfer of stress and volatility across platforms and asset classes (Zieba et al., 2019; Pagnottoni, 2023). The lack of centralized backstops, along with the algorithmic governance and large leverage, also serves to further enhance the risk of local perturbations developing into system-wide contagion. Such vulnerabilities have increased the arguments for risk-sensitive system design, greater transparency, and regulatory coordination to reduce spillovers to the financial system more generally (FSB, 2018; Manaa et al., 2021; Fantacci and Gobbi, 2024). Altogether, the discussion shows that the concept of stablecoins is an important crossroads in the stability environment of DeFi: not only do they allow markets to operate, but also they are a primary medium through which runs and shocks are propagated. The knowledge of these mechanisms is paramount in the formation of the resilient protocol design, supervisory systems, and eventual research on systemic risk of programmable financial systems.
Traditional finance developed the XVA framework — encompassing Credit Valuation Adjustment (CVA), Funding Valuation Adjustment (FVA), Margin Valuation Adjustment (MVA), and related components — in direct response to the systemic failures exposed by the 2008 financial crisis. The framework's central insight is that derivatives cannot be priced in isolation from the costs imposed by counterparty default risk, collateral funding, and regulatory capital. These adjustments are now standard practice at every major financial institution. As institutional capital increasingly flows into digital asset markets, and as the intersection of decentralized finance (DeFi) and traditional finance (TradFi) deepens structurally, a critical pricing gap has emerged: the absence of a rigorous Crypto XVA™ framework that addresses the unique risk characteristics of blockchain-based financial instruments. Prior scholarship has examined smart contracts as potential eliminators of counterparty risk (Morini & Sams 2015; Fries & Kohl-Landgraf 2018), but has not systematically constructed the affirmative case for a crypto-native valuation adjustment architecture. This paper addresses that gap through a framework of nine distinct adjustment categories organized in three tiers: Protocol-Level (SCVA, OVA, LRVA, BRVA, GVA), Asset-Level (SVA, TVLVA, LCVA), and Cross-Protocol / Network-Level, introduced in this revision through the Composability Valuation Adjustment (CompVA) — the fair-value reserve for propagation risk invisible to protocol- and asset-level adjustments, and the dominant loss channel in the April 18–19, 2026 Aave / Kelp DAO / LayerZero cascade, in which a bridge exploit at one protocol produced multi-billion-dollar TVL impact at uncompromised peer protocols. The framework is explicitly oriented to the fair-value-measurement regime — ASC 820 in the United States and IFRS 13 under IFRS — and is positioned alongside the presently divergent capital-adequacy regimes: the Basel Committee's Working Paper 44 and SCO60, which charge higher capital for permissionless infrastructure, and the March 2026 OCC / Federal Reserve / FDIC interagency FAQs, which adopt a technology-neutral capital rule. Both frameworks address capital adequacy; neither addresses measurement. Crypto XVA provides the missing measurement architecture, in which jurisdictional regulatory divergence itself enters fair value as a priced input through LCVA and the Tier III network correlations. The paper also examines what we term the Smart Contract XVA Paradox: prior claims that smart contracts eliminate counterparty risk are technically accurate but misleading. The correct statement is that DeFi transforms counterparty risk into smart contract risk; the net effect on total valuation adjustment depends on protocol-specific characteristics and cannot be assumed directionally. Because oracle parameters in DeFi are endogenous and programmable, Crypto XVA operates not only as a measurement architecture but as a control framework for protocol governance.
BACKGROUND: Climate shocks increasingly threaten Africa’s economic and institutional stability, yet their indirect effects through social sectors such as health remain insufficiently understood. Guided by political economy and welfare theory, this study examines how climate-induced disruptions affect access to healthcare, public or institutional trust, and the broader risk of social unrest and attitude towards coups d’état support across African countries. METHODS: The analysis uses cross-sectional data from 53,176 households across Africa and applies an ordered probit model with country fixed effects to account for country size and population structure. RESULTS: Climate shocks notably drought and flood events, significantly reduce access to healthcare services and erode public trust in health governance systems. Diminished health access and declining institutional confidence further increase the likelihood of social unrest and coup events, serving as key mediating channels through which environmental stress contributes to political instability. CONCLUSION: Strengthening climate-resilient health infrastructure, decentralizing public health financing, and investing in highly exposed regions are essential policy responses. Enhancing social protection and institutional credibility can help break the destabilizing feedback loop between environmental shocks, welfare declines, and political unrest.