<p>Existing financial systems are bloated with inefficiencies in their operation, lack of transparency and are characterized by and fallible and fragile accumulation points, whereas emerging decentralized finance (DeFi) platforms lack intelligent risk management, self-adaptive governance and provable security assurances. This paper proposes the Intelligent, Verifiable Financial Ledger (IVFL), a novel framework that harmoniously converts both Artificial Intelligence (AI) and blockchain to counteract their core drawbacks. AI-based smart contracts of a formally verifiable character that allows the intelligent, secure and auditable automated execution of complex financial transactions an agile and informed governance system, which is represented by the use of AI enhancements to the Decentralized Autonomous Organization (DAO). Simulation analysis shows that the IVFL framework enables substantial enhancements compared to baseline models, such as detecting anomalies with over 95% accuracy, decreasing operational overhead by 40 percent and becoming less vulnerable to coordinated network attacks. Coming back to provable security and adaptive intelligence, the IVFL framework represents a credible way of creating financial systems.</p>
The convergence of artificial intelligence (AI) and decentralized web technologies represents a pivotal shift in digital infrastructure, giving rise to the concept of AI-native protocols. These protocols integrate AI capabilities directly into their fundamental design, moving beyond mere application-level AI to create intelligent, adaptive, and autonomous decentralized systems. This paper explores the transformative potential of AI-native protocols in reshaping the decentralized web, often referred to as Web3. We delve into the architectural implications, key benefits such as enhanced security, efficiency, and scalability, and the profound societal impact of such a paradigm shift. Through a comprehensive literature review, we identify existing challenges in both AI and blockchain domains that AI-native protocols are uniquely positioned to address, including algorithmic bias, data privacy, and consensus mechanism inefficiencies. We propose a conceptual framework for designing these protocols, emphasizing core components like intelligent consensus, autonomous agents, and AI-powered smart contracts. Furthermore, the paper discusses the ethical considerations inherent in embedding AI within decentralized governance structures and outlines future research directions for fostering responsible innovation. Our findings suggest that AI-native protocols are not merely an incremental improvement but a foundational evolution that promises to unlock unprecedented levels of intelligence and autonomy across the decentralized digital landscape, fostering a more robust, equitable, and resilient internet.
تناولت هذه الدراسة الفقهية مسألة المتاجرة بالرموز غير القابلة للاستبدال (NFTs)، وهي رموز رقمية فريدة تُسجَّل على تقنية البلوك تشين وتُستخدم لإثبات ملكية الأصول الرقمية. وهدفت الدراسة إلى بيان الحكم الفقهي لهذه المعاملات في ضوء القواعد العامة للمعاملات المالية في الشريعة الإسلامية، من خلال تحليل خصائص هذه الرموز ومجالات استخدامها، وبيان مدى انطباق الضوابط الشرعية على تلك المعاملات. وقد خلصت الدراسة إلى أن الحكم يتوقف على طبيعة كل حالة، حيث إن بعض صور المتاجرة بهذه الرموز قد تندرج تحت البيوع الجائزة، إذا توفرت فيها شروط الصحة وانتفت عنها المحاذير الشرعية؛ بينما بعض الصور الأخرى قد تُعد من المعاملات المحرمة، بسبب الغرر أو الجهالة أو المقامرة. وأوصت الدراسة بضرورة وضع أطر شرعية واضحة لتنظيم هذه المعاملات في ظل التطورات الرقمية المتسارعة. This jurisprudential study explores the issue of trading in Non-Fungible Tokens (NFTs), which are unique digital assets registered on blockchain technology and used to prove ownership of digital content. The study aims to determine the Islamic legal ruling on such transactions in light of the general principles of financial dealings in Islamic law, by analyzing the features of NFTs, their uses, and the extent to which they comply with Shariah standards. The study concludes that the ruling depends on the nature of each case. Some forms of NFT trading may be considered permissible sales if the necessary conditions are met and no Shariah violations are involved. However, other forms may be deemed prohibited due to uncertainty, ambiguity, or elements of gambling.
Globally, the construction industry is faced with several challenges like inefficiencies, disputes, and a lack of transparency. This paper uses the case of Lusaka, Zambia to investigate the impact of adopting emerging digital technologies in the construction industry, with a particular focus on smart contracts and blockchain technology. Drawing on existing literature and theoretical frameworks, Technology Acceptance Model (TAM), this paper argues that through the adoption of smart contracts and Blockchain technologies, the construction industry in Zambia and the world over could result in many benefits. Lusaka was an ideal case study for validating these hypothesized benefits. The findings of this research identified both benefits and challenges to the adoption of smart contracts and blockchain technologies. The identified benefits include the efficiency in construction processes, an improvement in the supply chain management, mitigation of risks, and a fostering of greater trust among stakeholders within the construction industry. Emerging from the research data were challenges relating to technological illiteracy, absence of regulatory frameworks, and high costs of initial investment. The paper concludes by emphasizing that the benefits surpass the challenges hence the need for Zambia and other similar developing economies to consider transforming the construction industry processes through adopting blockchain technologies and smart contracts to revolutionizing construction practices.
Hsi‐Peng Lu, Ya-Yuan Ku, Kuo‐Lun Hsiao, Wadee Alhalabi
With the rise of blockchain and decentralized technologies, doubts about traditional financial institutions' efficiency have increased. Meanwhile, Web3 offers transparency, security, and autonomy. However, the existing literature overlooks role the role of doubt as a push factor while focusing on the positive effects of trust. Moreover, the role of crypto wallets as a mooring factor remains underexplored. This study applies push-pull-mooring theory to examine Web3 literacy, trust in machines, doubt in institutions, and switching costs. Data were collected from 165 survey respondents. The results indicate that Web3 literacy increases doubt in traditional institutions but does not significantly affect trust in Web3. Additionally, switching costs moderate the relationship between Web3 literacy and doubt. When switching costs are low, doubt rises significantly. This study provides a new perspective on Web3 adoption, showing doubt's push effect and the role of push-pull mooring in migration, thus addressing gaps in the literature. Furthermore, the findings highlight how decentralized finance's trust mechanism is evolving, offering insights for Web3 adoption.
The objective of this article is to identify the impact of corporate investments in Bitcoin on the stability of the cryptocurrency market, with particular emphasis on the investment strategy of MicroStrategy (currently Strategy). The first section of the paper outlines the operational mechanisms of Bitcoin, including its consensus system and the blockchain technology that underpins its security and decentralisation. The second section examines the structure of the cryptocurrency market, identifying its key participants and the mechanisms driving its volatility and dynamics. The third section is dedicated to an analysis of MicroStrategy’s quarterly reports for 2023 to 2024. The final section presents the conclusions, which indicate that the company’s aggressive acquisition strategy is associated with significant financial risk. The analysed data suggest that continued exposure to the highly volatile cryptocurrency market may lead to serious challenges for the firm, potentially undermining its long‑term financial stability. Consequently, this may pose systemic risks to the broader cryptocurrency market, particularly by exerting substantial downward pressure on the supply side.
Parisa Bouzari, Maria Fekete-Farkas, Zsigmond Gábor Szalay
This research investigates the efficacy of transformer architectures in classifying sustainability claims made by cryptocurrency projects, addressing a critical gap in automated environmental impact assessment of digital assets. Employing design science research (DSR) methodology, we develop and empirically evaluate a novel framework comparing five state-of-the-art transformer models across multiple performance dimensions. Through rigorous analysis of 300 synthetic cryptocurrency sustainability news articles, we demonstrate that RoBERTa-large-MNLI achieves optimal performance (F1: 1.00) with exceptional prediction stability (0.98)—meaning highly consistent predictions across varied inputs—and minimal entropy (0.05)—indicating strong confidence in classification decisions—albeit at higher computational costs. Our findings challenge conventional assumptions about the inverse relationship between model complexity and prediction reliability in specialized financial domains. The results advance theoretical understanding of transfer learning in sustainable finance while establishing quantitative benchmarks for automated environmental claim verification. This research contributes to both academic literature and regulatory frameworks by providing empirically validated methodologies for distinguishing between substantive and symbolic environmental initiatives in cryptocurrency markets. The findings provide valuable guidelines for cryptocurrency projects, financial institutions, and regulatory bodies seeking to implement automated sustainability assessment systems, while establishing a foundation for future research in the intersection of artificial intelligence and sustainable finance.
We examine the qualifying attributes of decentralized finance (DeFi) as a financial asset class. To achieve this objective, we perform analysis on the relationship (using both level and percentage-change data) between DeFi valuation and selected influencing variables, namely total value locked (TVL), Bitcoin (BTC) value, and market variables. A suite of long-panel data econometric methods is employed on a multi-frequency (daily, weekly, and monthly) panel dataset comprising 16 major DeFi protocols from January 2022 to December 2023. Our empirical design aims to be a comprehensive assessment and triangulation. There are several key findings. First, while there is evidence of cointegration suggesting a possible long-run relationship, this relationship is found to be inconsistent across different variables and time frequencies. However, the impulse response analysis suggests that shocks from the influencing variables do not have a permanent impact. Second, Bitcoin value is found to be the most important influencing factor (positive and highly significant), reflecting strong cryptocurrency market sentiment and aligning with previous research on spillover effects from major cryptocurrencies (Șoiman et al., 2022; Yousaf et al., 2022).
This study presents a systematic literature review (SLR) conducted under the PRISMA 2020framework to investigate the convergence of two transformative paradigms: Generative ArtificialIntelligence (GenAI) and Web3. The findings indicate that, while each technology independentlydrives digital transformation, their integration remains underexplored. GenAI advancesinnovation through algorithmic creativity, personalization, and automated content generation,whereas Web3, enabled by blockchain, smart contracts, non-fungible tokens (NFTs), anddecentralized autonomous organizations (DAOs), introduces decentralized mechanisms of trust,transparency, and digital ownership. Current research addressing the intersection of thesedomains is fragmented and predominantly conceptual, leaving critical gaps in trust mechanisms,governance structures, operational models, and legal frameworks.To address these gaps, this study proposes the conceptual AIChain Framework: a unifiedplatform that integrates GenAI-powered content generation, automated tokenization, trustengines, and decentralized marketplaces. This architecture demonstrates cross-sectoral potentialin creative industries, FinTech, and education by linking algorithmic creativity withdecentralized ownership. The contributions are threefold: (1) at the theoretical level, the studysynthesizes the Resource-Based View (RBV), the Dynamic Capabilities View (DCV), the digitaltrust framework, and the information interaction model to establish a foundation for analyzingGenAI–Web3 convergence; (2) at the practical level, it introduces an operational architecture fornext-generation platform development; and (3) at the policy and governance level, it highlightsthe need for transparent, auditable, and participatory models to prevent technological oligopolies.By bridging theoretical insights with practical implications, this research provides a roadmap forfuture scholarship and industry practice, including pilot implementations of the AIChainframework, the design of hybrid governance models, and the assessment of ethical andenvironmental implications surrounding GenAI–Web3 convergence.
The regulation of cryptocurrency presents a major challenge to financial governance in emerging economies such as Tanzania. The rapid growth of virtual assets, their decentralized nature, and potential for anonymity have raised significant concerns regarding money laundering, terrorist financing, and consumer protection. Internationally, the Financial Action Task Force (FATF) has established standards that require member states to regulate Virtual Asset Service Providers (VASPs) through licensing, supervision, and compliance with Anti–Money Laundering and Counter–Terrorist Financing (AML/CFT) measures. This article critically analyses the Tanzanian legal and institutional framework governing cryptocurrency in light of these international standards. It argues that although Tanzania has made preliminary steps such as recognizing digital assets under the Finance Act, 2024 and issuing public notices through the Bank of Tanzania there remains a significant regulatory gap in achieving full FATF compliance. The study concludes that comprehensive legislation is required to address the legal status of virtual assets, enhance regulatory oversight, and foster a balance between innovation and financial integrity.
Francesco Salzano, Simone Scalabrino, Rocco Oliveto, Remo Pareschi
Smart Contracts are critical components of blockchain ecosystems, with Solidity as the dominant programming language. While LLMs excel at general-purpose code generation, the unique constraints of Smart Contracts, such as gas consumption, security, and determinism, raise open questions about the reliability of LLM-generated Solidity code. Existing studies lack a comprehensive evaluation of these critical functional and non-functional properties. We benchmark four state-of-the-art models under zero-shot and retrieval-augmented generation settings across 500 real-world functions. Our multi-faceted assessment employs code similarity metrics, semantic embeddings, automated test execution, gas profiling, and cognitive and cyclomatic complexity analysis. Results show that while LLMs produce code with high semantic similarity to real contracts, their functional correctness is low: only 20% to 26% of zero-shot generations behave identically to ground-truth implementations under testing. The generated code is consistently simpler, with significantly lower complexity and gas consumption, often due to omitted validation logic. Retrieval-Augmented Generation markedly improves performance, boosting functional correctness by up to 45% and yielding more concise and efficient code. Our findings reveal a significant gap between semantic similarity and functional plausibility in LLM-generated Smart Contracts. We conclude that while RAG is a powerful enhancer, achieving robust, production-ready code generation remains a substantial challenge, necessitating careful expert validation.
Once a playground for tech enthusiasts, the crypto space has shifted to a financial field that is increasingly on policymakers’ radar due to the increasing adoption of crypto-assets, and also some significant crypto-related collapses. In this context, it is crucial to propose monitoring frameworks to assess the potential integration of the crypto sphere into traditional financial systems. We propose the use of the TVP-VAR approach as a strategic instrument for policymakers to analyze the connectedness between major financial markets and relevant crypto systems, such as the emerging centralized finance sector and the increasingly relevant decentralized finance ecosystem. Our findings indicate that the financial integration between the crypto space and traditional financial markets remains weak. Nonetheless, we report a very slight increase in connectedness since 2020, suggesting that while the crypto space is still far from being fully integrated, it has begun to establish modest but persistent links with conventional financial markets. • We examine dynamic connectedness between crypto and global equity markets. • TVP-VAR shows crypto–TradFi integration remains weak but rising since 2020. • DeFi and broad crypto indices transmit more spillovers than Bitcoin or CeFi. • Results highlight regulatory priority on DeFi and full-market monitoring.
The study explores the impact of non-fungible tokens on asset liquidity within the decentralized finance system, based on a systematic review of thirty articles retrieved from major scholarly databases. We analyzed how NFTs contribute to increasing liquidity and facilitate a shift in digital asset ownership. Findings show NFTs improve asset liquidity by permitting fractional ownership and trade of assets that were previously illiquid, like real estate and digital art. NFTs’ unique characteristics and market volatility may make them less liquid. Blockchain technology that underpins NFTs offers transparent and unchangeable ownership records. The ramifications show how developers, investors, and regulators may take advantage of NFTs’ while resolving obstacles, including scalability problems and regulatory uncertainty.
Over the past decade, the surge in popularity of cryptocurrency investment has garnered a lot of attention in the financial marketplace. This study aims to open the “black box” of cryptocurrency investors by understanding the past cryptocurrency investors’ characteristics. Specifically, we investigated the relationship between cryptocurrency investment investors and their characteristics, such as levels of financial literacy, as proxied by both subjective and objective financial knowledge measures, investment experience, and investment knowledge. We apply the logistic regression model to the data from the most recent cohort of the National Financial Capability Study 2021 (NFCS21). We find that investment experience and investment knowledge are the important factors related to investing in cryptocurrency among the characteristics examined. Surprisingly, we also find that individuals with higher education are less likely to become cryptocurrency investors. Finally, the present study reveals an interaction effect between age and investment knowledge, showing that the linkage between cryptocurrency investment and investment knowledge is stronger for younger investors with an age between 18 and 34 than for those above 44. This paper contributes to the existing literature on cryptocurrency investment by revealing the personal characteristics that categorize a cryptocurrency investor. This paper also extends the existing conceptual framework about cryptocurrency by showing that sociodemographic factors, such as age could moderate the linkage between investment knowledge and cryptocurrency investment.
Hanouf Al Ghanmi, Sabreen Ahmadjee, Rami Bahsoon, Hayatullahi Bolaji Adeyemo
Blockchain smart contract technology has revolutionised various industries by automating agreements through immutable and self-executing logic, reducing reliance on third-party intermediaries. However, despite its transformative potential, existing research has predominantly focused on technical aspects—particularly security—while largely neglecting human-in-the-loop concerns. Systematic efforts to explore these concerns from a human perspective have been limited which creates a gap in the literature. This study aims to address this gap by offering a comprehensive understanding of smart contracts from a human-centred perspective. To achieve this, we conducted a systematic literature review to examine human-related issues in smart contracts and their existing solutions. We found that concerns are primarily concentrated in two stages: development and interaction. During the development stage, issues arise in relation to programming languages, including complexity, readability and expressiveness, as well as the legality of smart contracts and their ethical and social implications. In the interaction stage, concerns focus on usability, human readability, trust, governance and cost. Additionally, we identified several quality attributes frequently associated with these concerns such as transparency, accountability, understandability, simplicity, learnability, compliance and fairness. We also uncovered new human-centred quality attributes that are overlooked in existing literature, such as explainability and interpretability. This research offers valuable insights for researchers, requirements engineers and designers by examining existing efforts to address human-centric concerns and proposing future directions and opportunities to improve smart contract design.
Cryptocurrency investment in India has quickly become a mainstream financial activity, but it is still highly prone to psychological factors that impact the decision-making of retail investors. This study examines the effect of personality traits on cryptocurrency investment behavior using the mediating variable of behavioral biases. Based on the Big Five Personality Model and the theory of Behavioral Finance, data were gathered from 716 Indian retail investors using a structured questionnaire. Partial Least Squares Structural Equation Modeling (PLS-SEM) was conducted to analyze the relationships among the variables. Results show that Openness to experience and Agreeableness significantly predict Availability Bias, whereas Extraversion and Agreeableness affect the Disposition Effect. The theoretical framework shows how bias-driven investment behavior in volatile markets such as cryptocurrency is triggered by personality-based predispositions. The study adds to the behavioral finance literature by taking psychological profiling outside the realms of traditional investment contexts into digital asset investing and provides practical insights for regulators, fintech platforms, and investment advisors to design interventions to mitigate bias and enhance investor education.
R. Li, Srisht Fateh Singh, Andreas Park, Andreas Veneris
This paper presents a securities tokenization solution that brings the accessibility, transparency, efficiency, and innovation of blockchain and decentralized finance to real-world securities. Tokenization in principle seems straightforward—an intermediary holds assets and issues 1:1 tokens—but decentralized finance applications (DeFi) introduce significant complications. Even basic DeFi mechanisms, such as liquidity pools, pose challenges for tokenizing stocks and bonds because when assets are pooled in smart contracts, ownership becomes unclear, hindering asset owners to access their entitlements, such as dividends, coupons, or voting rights. Existing solutions often fail to address these challenges and are typically limited to specific security types. Our solution, by contrast, generalizes to any security and any holding rights through fungible tokens and using separate smart contracts for shareholders to redeem their entitlements. To address the decentralized ownership issue, our solution employs off-chain accounting with additional logic for liquidity pools. We implement this on Ethereum, demonstrating that it is 27% cheaper in gas costs than current alternatives. We also analyze the liquidity logic of over 90% of Ethereum's liquidity pools, confirming compatibility with our solution. Finally, we demonstrate its use for dividend-paying stocks, common stock, mergers, and coupon-paying bonds.
Markus Jungnickel, Ferda Özdemir Sönmez, Catherine Mulligan, William J. Knottenbelt
Decentralized autonomous organizations (DAOs) have emerged as a novel organizational structure, attracting growing interest due to their decentralized, transparent governance, which replaces traditional hierarchies with stakeholder-managed rules codified as smart contracts. Although various governance models exist, comparative research across dimensions remains limited, leaving the literature fragmented and offering little practical guidance for selecting suitable models. This article critically analyses existing governance mechanisms and their implementation to support the development of more effective DAO models. To address current gaps, we review prior quantitative studies and conduct exploratory data analysis on centralization, participation, and decision controversy. The findings show that reputation and share-based models can mitigate the centralization seen in token-based systems, though all models suffer from low member engagement, suggesting an over reliance on direct democracy. Our analysis can be replicated across platforms and time frames to refine and validate these insights.
Christian Zeiß, Lisa Straub, Maximilian Greiner, Marcel Neis · 7 authors
Purpose To promote acceptance of blockchain-based investment options and enhance confidence for new investors, the market must become more comprehensible and accessible to the broad masses. This requires transparency to build trust in web-based intermediaries, particularly given the multitude of websites that often advertise unrealistic returns in the crypto sector. Consequently, intermediaries within the decentralized finance ecosystem need to be clearly identified and categorized to facilitate mass-market adoption. Design/methodology/approach We employ a six-iteration taxonomy approach, establishing a data foundation through literature reviews, expert interviews and document analysis of 50 intermediaries. Archetypes are derived using a hierarchical clustering algorithm. Finally, a survey is conducted to evaluate the taxonomy and the archetypes. Findings The taxonomy encompasses three meta-characteristics (functionality, architecture, security) and 63 characteristics. Furthermore, the research findings reveal six archetypes of blockchain-based investment intermediaries, demonstrating significant discrepancies between them, particularly in terms of financial features and governance structures. Given the complexity of crypto intermediary platforms for novice users, the findings underscore the need to implement technology-based and institutional-based trust mechanisms, improve risk assessment and enable informed decision-making. Originality/value By increasing market transparency and fostering trust, this study contributes to the acceptance and adoption of blockchain-based financial intermediaries, drawing on the diffusion of innovation theory. The proposed taxonomy, particularly its dimensions, specifically addresses the requirements of both technology-based and institution-based trust, which are critical for crypto investments. Moreover, the findings emphasize the importance of educational resources and communicated trust features in strengthening user confidence and facilitating broader market participation.
Krzysztof Lorenz, Piotr Gutowski, Ewelina Gutowska, Anna Drab-Kurowska
Digital transformation is reshaping innovation processes and capital allocation models, fostering the emergence of alternative financing mechanisms such as crowdfunding platforms. This study investigates the spatial determinants of digital innovation development using Kickstarter campaigns in the United States as a case study. Empirical data were preprocessed and classified into digital and traditional categories. Advanced AI methods, including Deep Autoencoders and Self-Organizing Maps (SOM), revealed spatial clusters of digital innovation in crowdfunding. Cluster visualizations exposed geographic concentration patterns and links to local infrastructure. AI uncovered latent ties between campaign structure and regional context, underscoring the role of AI and crowdfunding in decentralized, localized digital transformation.
We investigate how transparency—crypto exchanges' verification of trader identities through Know-Your-Customer (KYC) and their transmission of trader and transaction data to tax authorities—shapes the effectiveness of tax policies in cryptocurrency markets. Using regulatory events and cross-exchange price variation, we provide initial global evidence that transparency amplifies the capitalization of statutory crypto-tax liabilities into prices. In the United States, Bitcoin prices on exchanges subject to new tax reporting obligations fall by an average of 0.34 % following announcements that raise expectations of information transmission, even without changes in statutory tax liabilities. Across jurisdictions, price declines are significantly larger where reporting systems are more transparent, and in cross-sectional analysis, exchanges that both enforce KYC and transmit information show the strongest price sensitivity to local tax liabilities, particularly where capital controls constrain arbitrage. These findings reveal a transparency–privacy trade-off unique to crypto markets and demonstrate how digital assets provide rare opportunities to test classic tax-capitalization theories under conditions of anonymity and regulatory heterogeneity, with implications for the design of effective tax policies.
Yongsheng Guo, Ezaddin Yousef, Mirza Muhammad Naseer
This study investigates the relationship between cryptocurrency adoption rates (CARs) and the development of central bank digital currencies (CBDCs) using a global panel of 109 countries from 2020 to 2024. The analysis employs pooled OLS, fixed effects, ordered logistic regression and GMM models with robust controls for macroeconomic indicators, institutional quality, and technological readiness. CBDC status is measured as an ordinal variable representing five development stages, while CAR is derived from the Chainalysis Crypto Adoption Index. The empirical results show that higher CAR significantly increases the probability of a country progressing to more advanced CBDC stages. Margins analysis further indicates that increases in CAR substantially reduce the likelihood of remaining in early CBDC phases and raise the probability of reaching the pilot or launched stages. Heterogeneity analysis reveals that this relationship is strongest in low- and middle-income economies and in countries with low levels of financial inclusion, where cryptocurrencies present greater competition to traditional financial systems. The study contributes new large-sample evidence to the debate on digital currencies and provides policy-relevant insights: central banks in financially constrained economies appear to adopt CBDCs as developmental tools to enhance financial access and preserve monetary sovereignty in the face of growing cryptocurrency adoption.
This paper presents a comprehensive comparative analysis of two dominant blockchain consensus mechanisms, Proof of Work (PoW) and Proof of Stake (PoS), evaluated across seven critical metrics: energy use, security, transaction speed, scalability, centralization risk, environmental impact, and transaction fees. Utilizing recent academic research and real-world blockchain data, the study highlights that PoW offers robust, time-tested security but suffers from high energy consumption, slower throughput, and centralization through mining pools. In contrast, PoS demonstrates improved scalability and efficiency, significantly reduced environmental impact, and more stable transaction fees, however it raises concerns over validator centralization and long-term security maturity. The findings underscore the trade-offs inherent in each mechanism and suggest hybrid designs may combine PoW's security with PoS's efficiency and sustainability. The study aims to inform future blockchain infrastructure development by striking a balance between decentralization, performance, and ecological responsibility.
Krithika Rao, Shakil Khan, Bruce Singh, Nagulapati Kiran · 5 authors
Regulatory sandboxes—controlled environments where firms test innovations under regulatory supervision—have been adopted globally to manage fintech and crypto experimentation. This paper compares sandbox approaches and policy effectiveness for decentralized finance (DeFi) across the European Union, the United States, and the Asia-Pacific. Using a mixed-methods design (document analysis, stakeholder reports, and an illustrative quantitative model), we assess objectives, design choices, risk controls, and outcomes (market access, investor protection, and innovation diffusion). Findings show the EU’s pan-European coordination aims to harmonize testing and legal clarity; the US displays fragmented, agency-led pilot initiatives with stronger enforcement posture; Asia-Pacific exhibits rapid, varied adoption with jurisdictional leaders (Singapore, Hong Kong, Australia) using sandboxes as precursors to more formal rulebooks. Policy effectiveness depends on clarity of legal scope, cross-agency coordination, and well-designed exit and scaling rules. We conclude with policy recommendations and a research agenda for empirically measuring sandbox effectiveness for DeFi.