This paper presents the development of a decentralized healthcare marketplace, where patients can anonymously sell their data in the form of Non-Fungible Tokens (NFTs) to researchers. The platform aims to merge NFTs, decentralized finance, and patients' record management, empowering patients, expanding research opportunities, and enhancing healthcare outcomes through blockchain technology. The methodology employed for this research includes field research and discussions with professionals, ensuring credible and valuable insights. The article concludes that blockchain technology offers a transformative solution for healthcare record management, addressing issues of data security, privacy, interoperability, and transparency. Future work focuses on scalability and performance optimization, regulatory compliance, and governance, as well as interoperability and data standardization, among other areas, to unlock the platform's full potential.
Eman Daraghmi, Shadia Jayousi, YousefâAwwad Daraghmi, Raed S. M. Daraghma · 5 authors
The agriculture sector stands as one of the most significant sectors sustaining 70 percent of the worldâs population. In this sector, the supply consists of a series of interconnected stages, spanning from farming through production to the final delivery of goods to the end customer. A lack of transparency within the supply chain presents the largest gap between suppliers and retailers, such as ensuring the true value of products or services. This research introduces AgroChain, a Blockchain-based system that is designed to support the Agricultural Supply Chain (ASC) process. For scalability purposes, the proposed AgroChain solution comply with a process model that separates the registry of agricultural records from the record itself. The development of the AgroChain prototype along with its smart contracts that establish a transparent, yet secure, environment within the ASC under Quorum which is Ethereum oriented network is illustrated in this research. This research demonstrates that Blockchain networks offer a solution to manage the ASC ensuring traceability, privacy and integrity. Moreover, the research indicates that there is a pressing need to promote the standardization of ASC smart contracts, incorporating secure and straightforward process. Smart contracts have to ideally be implemented in consortium environments, enabling reliable validation of transactions by independent third parties without necessitating access to their content. Moreover, investigating the accountability for illegal activities become challenging.
Blockchain has been a vibrant technology in the past decade, with a wide variety of applications across different industrial sectors. The concept of blockchain has been widely recognized as an enabler for cryptocurrency-based decentralized payments, with two major decentralized payment systems such as Bitcoin and Ethereum. However, the global acceptance of blockchain as a cryptocurrency sums up significant challenges that hinder the fast adaptation of cryptocurrency as a payment service enabler. In this survey, we explore the advantages of blockchain and its technical capabilities beyond cryptocurrency. We focus on the technical potential to ensure trust, data governance, and automation of the financial application domain utilizing the fundamental security features of blockchain, including consensus, digital signatures, and transparency. The significant subcomponents of trust, data management, and automation in banking and financial systems are also identified and discussed, including how blockchain and smart contracts can achieve the anticipated features of each subcomponent through their technical capabilities. In addition, we shed light on the position of blockchain-based applications in key application sectors of the banking and financing domain with a mapping of technical features with the application domains. Thereafter, the applicability of blockchain-based applications is evaluated with relevant regulatory definitions. Finally, we discuss open research challenges and potential future works with the blockchain in the domain of financial systems.
In the evolving domain of blockchain, a critical challenge lies in the performance analysis of blockchains under controlled test conditions. This paper focuses on validating the Blockchain Benchmarking Framework (BBF), developed for the evaluation of blockchain protocols in a controlled environment. The BBFâs robustness and versatility are demonstrated through its application to the official Docker clients of Rippleâs XRP Ledger (XRPL) and Ethereum, deployed in private, local and controlled environments. These deployments are utilized to simulate network dynamics, transaction throughput, and resilience in a variety of scenarios. Our methodology encompasses tests ranging from standard operational conditions to adverse scenarios, including node failures and simulated double-spend attacks. These controlled environments are essential for evaluating the BBFâs efficacy in stress testing blockchain protocols and assessing their stability and robustness. The BBFâs ability to accurately capture and analyze performance characteristics is highlighted, providing insights into the operational mechanics, scalability, and resilience of these blockchain clients. The findings emphasize the BBFâs adaptability and effectiveness in managing different blockchain protocols, reaffirming its potential for broader application in pre-launch testing and analysis of blockchain performance. This study contributes to the understanding of how blockchain clients can be preliminarily assessed before mainnet deployment as well as to validate all the design decisions made by the protocol under different settings and synthetic scenarios.
Can the general structure of a mortgage-backed security (MBS) contract be programmatically represented through the use of decentralized autonomous organizations (DAOs)? Such an approach could allow for the portfolio of loans to be managed by investors in a trustless and transparent way. The focus and scope of this paper is to explore the potential for applying the tools of modern fintech, such as asset tokenization, smart contracts, and DAOs, to reconstruct traditional structured products that have a greater degree of transparency and traceability. MBS investors face considerable value uncertainty as time increases between the actual occurrence (or non-occurrence) of cash flows and subsequent reporting. Given that an MBS is a financial contract, it should be expressible logically using the Algorithmic Contract Types Unified Standards (ACTUS). Since each underlying mortgage in an MBS derives its cash flows in a prescribed way over the life of the contract, implementation on a public blockchain could enable real-time ratings systems, improving market efficiency. We explore the potential for creating formal algorithmic designs of MBS-DAOs that incorporate individual mortgages, the underlying real estate assets (collateral), and any loan guarantees.
Paul van Vulpen, H.M. Heijnen, S. P. van Mens, Thijn Kroon · 5 authors
Upgradeable smart contracts allow decentralized autonomous organizations (DAOs) to address bugs, enhance security, and expand functionality post-deployment. The proxy pattern enables smart contract upgradeability but introduces admin-centric governance, where power is concentrated in a single or small number of addresses. This paper explores the potential of decentralized smart contract governance to overcome admin centric governance while achieving flexibility in governing smart contracts. We investigate the Diamond Pattern as a flexible upgradeable contract framework that allows for modular smart contracts. Using the SecureSECO DAO as a case study, we examine how the diamond pattern can be configured for decentralized governance. The used architecture allows DAOs to upgrade smart contracts collectively through community consensus, and the implementation provides proposals, votes, and execution without requiring technical knowledge. The study highlights the benefits of this approach, namely, flexibility in smart contract governance, enhanced modularity, and a single point of interaction for governance. We also discuss limitations and challenges for upgradeable smart contracts such as the decision-making delays and potential vulnerabilities. To encourage adoption of consensus governance, we call for the creation of user-friendly tooling and smart contract facets.
This paper analyses the transition of Ethereum (ETH) from the energy-intensive Proof-of-Work (PoW) to the less energy-intensive Proof-of-Stake (PoS). We analyze returns, volatility, return correlations and volume of ETH, ETC and Bitcoin for all events in the lead-up to the actual change from PoW to PoS also labelled "the merge." The analysis suggests that some investors value the less energy-intensive mining mechanism and invest in ETH. However, since the overall effect is weak, we conclude that despite all the media attention and the stated concerns about the high energy-intensity of Bitcoin and PoW, most investors do not react to the change with an increased investment in Ethereum.
Effective governance plays a pivotal role in aligning the interests of diverse stakeholders and shaping the strategic directions of organizations. However, the dominant model of corporate governance often concentrates power among a limited group of directors, leading to concerns about potential power imbalances that may distort fair representation and compromise decision-making integrity. Decentralized autonomous organizations (DAOs) present an alternative model that distributes power among a broader base of stakeholders, fostering a more democratic approach to collective decision making and governance. However, the openness and fluidity inherent in DAOs can expose them to coordination challenges, governance complexities, and potential exploitation by malicious entities. In response to possible governance challenges, we consider DAOs as digital commons and adapt Ostrom's eight principles for governing the commons to propose a new governance framework for DAOs. This governance framework is designed to foster the collective stewardship of shared digital assets and the equitable distribution of decision-making authority in the Web3 era. As DAOs emerge as a novel organizational structure, our governance framework aims to maintain their resilience, inclusiveness, and decentralization, reinforcing their crucial role in the evolving Web3 landscape.
C. Vinoth Kumar, Poongundran Selvaprabhu, Nivetha Baska, Vivek Menon U · 7 authors
The Know Your Customer (KYC) process is a fundamental prerequisite for any financial institutionâs compliance with the regulatory framework. Blockchain technology has emerged as a revolutionary solution to enhance the effectiveness of the KYC procedure. It ensures that the KYC process is transparent, secure, and immutable, thereby offering a robust solution to combat fraudulent activities. The potential of blockchain technology in revolutionizing the KYC process has been acknowledged globally. Blockchain technology provides a decentralized platform for storing customer data, enabling financial institutions to access the information seamlessly. Using ethereum blockchain technology in KYC procedures can enhance the efficiency of financial institutions, significantly reducing the time and cost associated with the process. This work aims to provide a viable and sustainable solution to the challenges that banks experience in implementing KYC procedures and onboarding new customers. The proposed solution involves the central bank maintaining a comprehensive register of all registered banks while closely monitoring their adherence to the existing regulations governing KYC and customer acquisition.
Sabrina Leo, Andrea Delle Foglie, Luca Barbaro, Edoardo Marangone · 6 authors
Credit Guarantee Schemes (CGSs) are crucial in mitigating SMEs' financial constraints. However, they are renownedly affected by critical shortcomings, such as a lack of financial sustainability and operational efficiency. Distributed Ledger Technologies (DLTs) have shown significant revolutionary influence in several sectors, including finance and banking, thanks to the full operational traceability they bring alongside verifiable computation. Nevertheless, the potential synergy between DLTs and CGSs has not been thoroughly investigated yet. This paper proposes a comprehensive framework to utilise DLTs, particularly blockchain technologies, in CGS processes to improve operational efficiency and effectiveness. To this end, we compare key architectural characteristics considering access level, governance structure, and consensus method, to examine their fit with CGS processes. We believe this study can guide policymakers and stakeholders, thereby stimulating further innovation in this promising field.
The collectibles market, encompassing diverse assets such as fine art, rare books, and sports memorabilia, faces significant challenges in authentication, provenance tracking, and liquidity.Web3 technologies, particularly non-fungible tokens (NFTs), offer transformative solutions to these issues.This paper explores the application of NFTs and blockchain technology across various collectible asset classes, highlighting their potential to enhance transparency, security, and accessibility.The study explores the practical applications of NFTs, with a focus on their impact on physical collectibles, and examines the challenges and opportunities presented by Web3 integration.The paper concludes with a discussion on future research directions, emphasizing the need for comparative analyses and economic impact studies to fully understand the potential of Web3 in revolutionizing the collectibles market.
This paper explores Web3, the next phase of internet evolution driven by decentralization and blockchain technology, contrasting it with Web1 and Web2.It examines Web3's transformative potential in industries such as finance, art, gaming, and governance, with a focus on Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), Metaverses, and Decentralized Autonomous Organizations (DAOs).While Web3 offers significant promise, it faces challenges like scalability, security, regulatory uncertainty, and user experience issues.The paper also addresses the SEC's investigation of OpenSea, the largest NFT marketplace, as a critical obstacle for Web3's future.Finally, it discusses Web3's trajectory and highlights areas for future research.
In this article, we discuss the potential of Web3 in the context of decentralized finance (DeFi). Web3, as the new generation of the internet and new approaches, comes with a decentralized architecture and increased security through the use of blockchain technology. These characteristics make Web3 a suitable environment for DeFi, which is a decentralized financial system based on blockchain technology and smart contracts to provide financial services. DeFi eliminates the need for intermediaries in financial transactions and can provide access to financial services globally, even for those who do not use traditional financial instruments. We address the various aspects of DeFi that are possible through the use of Web3, such as payments, loans, and digital asset exchanges. We also aim to address how Web3 can solve some of the current issues facing DeFi, such as scalability and interoperability. Additionally, we discuss the regulatory perspective, how these new financial systems bring and create new risks, and what the management tools for these risks can be from two perspectives: financial stability and the protection of consumers/investors, and financial education as a proactive element of self-management of increasingly complex new financial concepts. DeFi is one of the most innovative and exciting applications of blockchain technology that can transform and improve the global financial system. However, DeFi is still in its early stages and faces certain challenges, such as scalability and interoperability between different DeFi platforms. Web3 can play a significant role in addressing these challenges by creating a decentralized environment that can facilitate value transfer and interconnectivity between different DeFi platforms. Web3 can also enhance the security and transparency of DeFi platforms by leveraging blockchain technology and smart contracts. The emergence of DeFi also brings new risks and challenges, particularly in terms of regulation and consumer protection. Financial authorities must adopt a proactive approach to regulate these new financial systems and ensure their stability and security, while also promoting financial education and awareness among consumers and investors
Douglas J. Cumming, Niclas Dombrowski, Wolfgang Drobetz, Paul P. Momtaz
Coordination frictions prevent the efficient adoption and governance of blockchain-based platforms. Crypto funds (CFs) create value by smoothing frictions on decentralized digital platforms (DDPs). CF-backed DDPs obtain higher valuations in the primary token market, outperform their peers after issuing tokens, and benefit from token price appreciation around CF investment disclosure in the secondary market. Primary transaction data from the Ethereum ledger shows that the valuations of DDPs with meager adoption and a higher centralization of token ownership benefit more from CF backing. The positive valuation and performance effects for CF-backed DDPs are more pronounced for CFs that are more central in investor networks.
The article analyzes the differences between centralized and decentralized exchanges in the cryptocurrency market. The author notes the impact of bankruptcies of centralized representatives who provided services in the cryptocurrency market on the interaction of users with decentralized finance instruments. The publication considers the key representatives of decentralized finance, their capitalization, available capital, and technological developments. It substantiates the advantages and risks of using decentralized finance instruments and studies the differences between centralized, decentralized, and algorithmic stablecoins. To assess the capitalization of decentralized finance instruments, the asset value indicator TVL (Total Value Locked) is used. TVL represents the amount of assets currently placed in a particular decentralized finance instrument or protocol. The RWA narrative is significant in the crypto space as it demonstrates increased interconnectedness. DeFi, previously isolated from TradFi, has now become an integral part of a more holistic financial ecosystem. Blockchain technology has demonstrated its potential for transformation through real-world use cases. Real-world assets (RWAs) are an attractive option due to the large traditional finance market. While they offer benefits such as portfolio diversification and enhanced returns, it is crucial to mitigate default risk. Platforms like Goldfinch have a proven track record. Tokenizing RWAs can increase market participation and financial inclusivity. The study's results indicate significant development of decentralized finance instruments over the past three years. This is evidenced by the amount of capital invested in these instruments and the number of users, despite the technological and regulatory risks associated with them. The study's conclusions indicate that despite the technological novelty, users are increasingly interested in interacting with decentralized finance instruments. However, users face difficulties in understanding how these instruments work and in gaining experience with these products. The comparative analysis by Saif Ahmed Abdulhakeem and Qiuling Hu titled "CeFi vs. DeFi â Comparing Centralized to Decentralized Finance" systematically contrasts Centralized Finance (CeFi) with Decentralized Finance (DeFi) across legal, economic, security, privacy, and market manipulation dimensions. It aims to provide a structured approach for distinguishing between CeFi and DeFi services, emphasizing DeFi's transparency and user control advantages. However, unresolved issues in decentralized finance, such as regulatory frameworks and risk assessment, necessitate further research. The study also underscores the importance of improving user experience design and overcoming adoption challenges for DeFi. In their academic discourse titled "Powered by Blockchain Technology, DeFi (Decentralized Finance) Strives to Increase Financial Inclusion of the Unbanked by Reshaping the World Financial System," Abdulhakeem and Hu analyze DeFi's potential to enhance financial inclusion for the unbanked. They highlight the pivotal role of blockchain, particularly Ethereum, in enabling DeFi. While acknowledging DeFi's decentralization benefits, the article suggests it as a complement rather than a replacement for traditional finance. It advocates for future research on integrating DeFi with global banking systems and improving user interface and security. Overall, while recognizing DeFi's transformative potential, the article underscores the need for ongoing research to address challenges and integrate DeFi into mainstream finance seamlessly.
The convergence of Decentralized Finance (DeFi) and Artificial Intelligence (AI) represents a transformative development in the financial industry, offering the potential to revolutionize traditional financial services and create new, innovative solutions. This research paper explores the synergies, opportunities, and challenges arising from the integration of AI technologies into DeFi platforms. By leveraging the decentralized, transparent, and secure nature of blockchain technology and the data-driven, intelligent capabilities of AI, DeFi-AI solutions can enable more efficient, accessible, and personalized financial services. The paper discusses various AI-powered DeFi applications, such as automated market makers, AI-driven lending and credit scoring, intelligent yield farming strategies, and AI-assisted portfolio management. Furthermore, it examines the potential of decentralized AI (DeAI) to address issues of data privacy, bias, and centralization in traditional AI systems. However, the convergence of DeFi and AI also presents significant challenges, including regulatory uncertainty, scalability limitations, data privacy and security risks, and talent scarcity. The paper highlights the need for a multi-stakeholder approach to address these challenges and realize the full potential of DeFi-AI integration. The implications of DeFi-AI convergence for the financial industry and society are discussed, emphasizing the potential for increased financial inclusion, innovation, and stability. Finally, the paper identifies future research directions and calls for collaboration among researchers, developers, regulators, and industry participants to drive responsible innovation in this emerging field.
Distributed Ledger Technology (built on a blockchain) enables peer to peer interactions between financial institutions without the need for any distinguished, trusted intermediaries. In principle, this opens the possibility of removing the âtoo big to failâ risk of CCPs and of significantly speeding up settlement times to just a few minutes, if not seconds. This could result in material reductions in capital/margins to protect against counterparty risk, and material reductions in back-office reconciliation costs. This attractive vision is by now well-known and is recalled in section 1. The objective of section 2 is to identify any limitations the PFMI standards might impose on the use of DLT (blockchain) in a Financial Market Infrastructure. Section 3 takes a business perspective and looks at the challenges of shortening settlement windows to T+1 and beyond. The last section discusses how settlements might potentially evolve in the equity markets in the future to address the apparent loss of the multilateral netting benefit in very short (near instantaneous) settlement times.
The term "cryptocurrency" refers to a form of digital or virtual currency that does not exist in tangible form like paper money. That cryptocurrency can only be used with internet-connected PCs, laptops, smartphones, and other devices. Cryptosystems that make use of the blockchain system have a number of advantages, including the speed, convenience, and security of transactions, as well as the ability to be used in all nations and continents. However, there is still room for improvement in the circulating cryptocurrency, including the absence of supervisory authorities. Experts, including Islamic scholars, are constantly debating the advantages and disadvantages of using cryptocurrencies. The Koran, al-Hadith, Qiyas, and Sad-Adzariyah are the sources used in this study to examine the dynamics of cryptocurrency use from the perspective of ushul fiqh. Increasingly, cryptocurrency transactions are used for speculation, which violates Islamic principles. According to Surah Al-Qur'an An-Nisa verse 29, the elements of superiority are gharar and maysir, so the use of cryptocurrencies is permitted subject to certain conditions. Additionally, a country's legality must be clear for cryptocurrency to be used safely.