Decentralized Finance (DeFi) services are usually constructed by composing a variety of smart contracts. While composability is a key driver of the success of DeFi, it also creates security risks: adversaries may exploit interactions between newly deployed contracts and the pre-existing ones to inflict economic losses. We introduce MEV non-interference, a formal security notion for DeFi composability requiring that the maximal extractable value from a set of newly deployed contracts is not increased by interactions with the existing blockchain state. To support this notion, we define local MEV, a novel measure of economic attacks that focusses on the loss of a given set of victim contracts. We study two adversarial models, with bounded and unbounded wealth, and establish sufficient conditions and locality principles that enable modular reasoning about secure composability. We apply the framework to representative DeFi compositions, including exchanges, AMMs, options, lending pools, routers, and arbitrage contracts, showing how it distinguishes secure compositions from vulnerable ones. Our results provide a formal foundation for reasoning about the economic security of DeFi compositions.
Smart contract vulnerabilities in Decentralized Finance (DeFi) protocols resulted in over 1.49 billion USD in confirmed losses in 2024 alone, across 192 incidents [1]. As LLM-based vulnerability detection emerges as a promising approach to address these threats, the quality of evaluation datasets has become a critical bottleneck. Existing datasets suffer from three fundamental problems: they are built on outdated Solidity versions (e.g., v0.4) that no longer reflect modern DeFi contracts [5][6][7]; they rely on automated or LLM-generated annotations that introduce hallucination-driven label noise [9][10]; and they apply coarse single-layer labeling that fails to capture the semantic complexity of real-world business logic vulnerabilities [6][7][11][12]. We present Bastet, an expert-labeled DeFi smart contract vulnerability dataset that addresses all three problems through real-world audit findings (2021-2024), human expert annotation with discussion-based consensus, and a two-layer taxonomy of 46 Tags and 77 Subtags. Bastet comprises 4,402 findings collected from 394 Code4rena competitive audit reports spanning April 2021 to November 2024, of which 849 findings are fully annotated by white-hat security researchers from the DeFiHackLabs community. All annotations are produced through a two-annotator consensus workflow, ensuring label accuracy grounded in real-world vulnerability root causes.
Τα τελευταία χρόνια, οι Αποκεντρωμένες Εφαρμογές (Decentralized Applications - DApps) γνωρίζουν σημαντική ανάπτυξη, και η ικανότητά τους να διαχειρίζονται ψηφιακά περιουσιακά στοιχεία υψηλής αξίας έχει οδηγήσει σε σημαντική καινοτομία σε τομείς όπως η αποκεντρωμένη χρηματοοικονομική (Decentralized Finance - DeFi), η διακυβέρνηση (governance) και η διαχείριση της εφοδιαστικής αλυσίδας (supply chain management), με τη δημιουργία διαφόρων δικτύων blockchain για την κάλυψη της ζήτησης για τέτοιες υπηρεσίες. Παράλληλα, έχουν αναπτυχθεί διάφορες μεθοδολογίες για την προστασία αυτών των δικτύων από κακόβουλους παράγοντες (malicious actors) που επιχειρούν να εκμεταλλευτούν αδυναμίες (vulnerabilities) που υπάρχουν στα έξυπνα συμβόλαια (smart contracts) τα οποία εκτελούν μια προκαθορισμένη επιχειρηματική λογική (business logic), με σκοπό να κλέψουν μεγάλα χρηματικά ποσά μέσω αυτών. Αν και το οικοσύστημα του Ethereum επωφελείται από μια ώριμη σουίτα εργαλείων ασφαλείας, αυτά είναι κυρίως σχεδιασμένα για τον εντοπισμό συντακτικών αδυναμιών (syntactic vulnerabilities), παραλείποντας συχνά σφάλματα που προκύπτουν από την απόκλιση μεταξύ του επιδιωκόμενου σχεδιασμού ενός έξυπνου συμβολαίου και της υλοποίησής του στην αλυσίδα (on-chain implementation), επιτρέποντας έτσι στους επιτιθέμενους να χειραγωγήσουν τη λειτουργικότητα του συμβολαίου για κακόβουλο όφελος. Νέα δίκτυα blockchain και γλώσσες προγραμματισμού, όπως το δίκτυο Sui και η γλώσσα του Sui Move, έχουν δημιουργηθεί προσφέροντας νέες δυνατότητες και χαρακτηριστικά, αλλά ταυτόχρονα εισάγουν νέες κατηγορίες κινδύνου. Ορισμένα παραδείγματα είναι η διαρροή δυνατοτήτων (capability leakage) και οι παραβιάσεις του προτύπου μάρτυρα (witness pattern violations), οι οποίες είναι αόρατες στις παραδοσιακές ταξινομίες ασφαλείας που βασίζονται στο Ethereum, λόγω των διαφορετικών υποδομών και προγραμματιστικών μοντέλων. Η πρόληψη τέτοιων επιχειρηματικών αδυναμιών (business vulnerabilities) απαιτεί κατάλληλη τυπική μοντελοποίηση και επαλήθευση (formal modeling and verification) της επιδιωκόμενης επιχειρηματικής διαδικασίας εντός των έξυπνων συμβολαίων, διασφαλίζοντας ότι όλες οι πιθανές αλληλεπιδράσεις παραμένουν συνεπείς με την αναμενόμενη συνολική συμπεριφορά του συστήματος. Η παρούσα έρευνα αντιμετωπίζει αυτό το πρόβλημα αναπτύσσοντας ένα τυπικά θεμελιωμένο, καθοδηγούμενο από οντολογίες πλαίσιο ανάλυσης ασφάλειας (formally grounded, ontology-driven security analysis framework) ειδικά για τη γλώσσα Sui Move, κωδικοποιώντας τις σημασιολογικές σχέσεις μεταξύ των δομών κώδικα (code constructs) της Sui Move, των προτύπων ασφαλείας (security patterns) και των κατηγοριών αδυναμιών. Για την επίτευξη αυτού του στόχου, η παρούσα διατριβή ακολουθεί τη μεθοδολογία Design Science Research (DSR), προκειμένου να γεφυρώσει το χάσμα μεταξύ της αρχιτεκτονικής πρόθεσης υψηλού επιπέδου (το «γιατί» - the why) και των ελαττωμάτων κώδικα χαμηλού επιπέδου (το «πώς» - the how). Τα συμπεράσματα που προέκυψαν από μια συστηματική μελέτη χαρτογράφησης (systematic mapping study) και τη σύγκριση των γλωσσών προγραμματισμού Solidity και Sui Move χρησιμοποιούνται για τη δημιουργία δύο τεχνουργημάτων (artifacts): 1) ενός οντολογικού πλαισίου έξι επιπέδων (six-layer ontological framework) για τη Sui Move και 2) ενός εργαλείου ανάλυσης (Sui Move Analyzer). Όσον αφορά το οντολογικό πλαίσιο, περιλαμβάνονται η χαρτογράφηση γραμματικής (grammar mapping), η ταξινόμηση ασφαλείας, τα αρχιτεκτονικά πρότυπα και η τυπική μοντελοποίηση συμπεριφοράς (formal behavioral modeling), σε συνδυασμό με τη δημιουργηθείσα ταξινόμηση Sui-Unified Weakness Classification (SUWC), η οποία κατηγοριοποιεί τα ελαττώματα που σχετίζονται ειδικά με την πλατφόρμα (platform-specific defects) σε τέσσερις ομάδες, ευθυγραμμισμένες με μια βιβλιοθήκη τεσσάρων επαληθευμένων σχεδιαστικών προτύπων ασφαλείας (security design patterns) της ενσωματωμένης οντολογίας. Όσον αφορά το δεύτερο τεχνούργημα, αυτό αναπτύχθηκε για να αξιολογήσει την πρακτική χρησιμότητα του οντολογικού πλαισίου, χρησιμοποιώντας μια αρχιτεκτονική διπλής ροής (dual-pipeline architecture) που συνδυάζει την παραδοσιακή εξαγωγή ευρετικών κανόνων (heuristic extraction) με την οντολογική συλλογιστική που βασίζεται σε SPARQL (SPARQL-based ontological reasoning). Χρησιμοποιώντας αυτή τη μεθοδολογία, ο αναλυτής μπορεί να εντοπίσει κινδύνους σε σημασιολογικό επίπεδο (semantic-level risks), ενώ παράλληλα βοηθά τους προγραμματιστές προτείνοντας αυτοματοποιημένες αποκαταστάσεις βασισμένες σε πρότυπα (pattern-based remediations), οι οποίες βασίζονται σε καθιερωμένα παραδείγματα ασφάλειας (security paradigms). Η αξιολόγηση των τεχνουργημάτων ακολουθεί το Framework for Evaluation in Design Science (FEDS), συνδυάζοντας τεχνητή αθροιστική αξιολόγηση (artificial summative evaluation) μέσω ειδικά κατασκευασμένων συμβολαίων με γνωστή αντικειμενική αλήθεια (ground truth), και φυσιοκρατική αθροιστική αξιολόγηση (naturalistic summative evaluation) μέσω της ανακατασκευής μιας πραγματικής εκμετάλλευσης (exploit reconstruction), προκειμένου να διασφαλιστεί τόσο η εσωτερική όσο και η εξωτερική εγκυρότητα (internal and external validity). Σε 14 συμβόλαια Sui Move, 42 περιπτώσεις δοκιμών (test cases) και ένα σενάριο εκμετάλλευσης (exploit scenario), χρησιμοποιούνται 13 ποσοτικές μετρικές που καλύπτουν την ορθότητα (precision, recall, F1-score), την κάλυψη (taxonomy and pattern completeness) και την πρακτική χρησιμότητα (false-positive rate, runtime performance). Η εγκυρότητα και των δύο τεχνουργημάτων αξιολογείται επιπλέον σε πέντε διαστάσεις (μέσου, τεχνική, σχεδιασμού, σκοπού και γενίκευσης - instrument, technical, design, purpose, and generalization), επιβεβαιώνοντας ότι το πλαίσιο αποδίδει σταθερά σε όλες τις στοχευμένες διαστάσεις εγκυρότητας και πληροί την απαιτούμενη αυστηρότητα (rigor) για να κλείσει επαρκώς τον κύκλο DSR.
Programmable money—digital currency whose behaviour is controlled by code—creates new design space for dynamic, data-driven monetary policy. This paper proposes a framework for AI-adjusted interest rates in programmable monetary systems, w here machine-learning models continuously calibrate interest-rate parameters in response to real-time economic and network conditions. We formally describe the architecture of such systems, illustrate how AI-driven mechanisms can extend existing algorithmic interest-rate models in decentralized finance (DeFi), and discuss their potential integration with central bank digital currencies (CBDCs). Using stylized simulation data calibrated to typical DeFi lending dynamics, we compare baseline algorithmic rate m odels with an AI-adjusted variant, showing reduced volatility and smoother utilization patterns. A case study on Compound and Aave interest-rate mechanisms demonstrates how AI- based forecasting and reinforcement learning could enhance stability and policy precision. We conclude by outlining governance, regulatory, and ethical considerations, and propose a research agenda for AI-driven algorithmic monetary policy.
Nazneen Fatema, Abdullah Mohammed Ibrahim, Jesmin Sabnam, Abdullah Mohammad Ismail
This bibliometric study maps research trends in cybersecurity and data breaches within the financial sector from 2020 to 2024, analyzing 7355 documents from the Web of Science. The findings reveal a rapidly expanding and interdisciplinary field, driven by the digital transformation of finance, heightened cyber threats, and the impact of global events such as the COVID-19 pandemic. The research landscape has evolved from descriptive, technical studies to sophisticated analyses incorporating network theory, econometrics, and risk management. Most prolific authors and sources, such as IEEE, demonstrate strong international collaboration and significant citation impact, with China, the USA, and the UK leading in citations. Co-citation network analysis identifies three major intellectual clusters: economic modeling of cyber risk, network-based risk propagation, and systemic macro-financial implications of cyberattacks. The study highlights an increasing focus on quantifying the financial and reputational impacts of cyber incidents, making research directly relevant to business and regulatory stakeholders. Limitations include reliance on a single database and quantitative methods. Future research directions emphasize the security implications of emerging technologies (e.g., quantum computing, decentralized finance, artificial intelligence), behavioral and cultural aspects of cybersecurity, and systemic regulatory challenges. The field is dynamic, reflecting the financial sector’s evolving risk landscape.
Financial technology (FinTech) has emerged as a key driver of financial inclusion, transforming access to payments, credit, savings, and insurance for households, small businesses, and underserved populations worldwide. This study synthesizes a decade of Scopus-indexed bibliometric and systematic-review research on FinTech and financial inclusion published between 2015 and 2025. Rather than conducting a new bibliometric extraction, it provides a comparative synthesis of major peer-reviewed review studies, consolidating evidence on publication trends, intellectual structure, geographic distribution, and emerging research themes. The findings reveal rapid growth in scholarly output since 2016, led by China, India, the United States, and the United Kingdom. Dominant themes include digital payments, mobile money, regulatory technology, artificial intelligence, decentralized finance, financial literacy, SME finance, and sustainability-oriented digital finance. The review identifies persistent gaps in low-income regions and limited integration of AI and ESG perspectives. It offers a consolidated evidence base and proposes directions for future research, policy formulation, and practice.
The rapid expansion of cryptocurrency markets has fundamentally transformed the global financial system and challenged traditional approaches to financial regulation. Cryptocurrency exchanges have emerged as key intermediaries facilitating the purchase, sale, transfer, and storage of digital assets across jurisdictions. However, the borderless and decentralized nature of cryptocurrencies has generated significant legal concerns relating to anti-money laundering compliance, counter-terrorist financing measures, consumer protection, taxation, cybersecurity, market manipulation, and regulatory enforcement. This article examines international legal frameworks governing cryptocurrency exchanges, analyzes regulatory approaches adopted by leading jurisdictions, including the European Union and the United States, and evaluates major enforcement actions involving Binance and FTX. The study further explores emerging challenges associated with decentralized finance (DeFi) and proposes recommendations aimed at strengthening international cooperation and harmonizing legal standards for digital asset regulation.
The growing demand for secure, transparent, and efficient financial systems has accelerated interest in blockchain technology within the financial sector. This study investigates the determinants and outcomes of financial blockchain adoption by proposing an integrated research model that links core blockchain characteristics security and transparency, smart contracts, and decentralization to financial blockchain adoption and its subsequent effects on fraud reduction, risk management, and cost efficiency. Using data collected from financial institutions operating in Jordan, the study applies Partial Least Squares Structural Equation Modeling (PLS-SEM) to empirically test the proposed hypotheses. The findings demonstrate that security and transparency, smart contracts, and decentralization significantly and positively influence financial blockchain adoption. Moreover, the results confirm that financial blockchain adoption has a strong positive impact on fraud reduction, risk management effectiveness, and operational cost efficiency. By conceptualizing blockchain adoption as a strategic organizational capability rather than a purely technological choice, this study extends existing blockchain and fintech literature. The findings provide valuable theoretical insights into how blockchain characteristics translate into tangible financial outcomes and offer practical guidance for financial institutions and policymakers seeking to enhance trust, governance, and efficiency through blockchain-based financial systems.
Sylvester Kyei‐Gyamfi, Prince Boamah Abrah, Frank Kyei‐Arthur
ABSTRACT This study examines how Ghana's decentralized governance system shapes public social welfare service delivery, with a specific focus on the Department of Social Welfare (DSW). In Ghana, decentralization involves the transfer of administrative and fiscal responsibilities for social services from the central government to Metropolitan, Municipal, and District Assemblies, within which the DSW operates. Using a qualitative case‐study design, the study purposively sampled 30 national and regional DSW officers (60% male, 40% female). Data were collected through in‐depth interviews and analyzed thematically. The findings reveal three interrelated challenges: role conflicts arising from dual reporting lines, human resource gaps that undermine effective service delivery, and persistent funding and logistical constraints. In response, officers adopted coping strategies such as informal inter‐agency collaboration, role multitasking, and internal financing mechanisms. Participants proposed reforms including clarifying institutional mandates, professionalizing social welfare practice, securing sustainable budgetary allocations, and introducing digital monitoring systems to enhance accountability. Overall, the study underscores the need for structural reforms to strengthen decentralized social welfare service delivery in Ghana.
Shahinaz Hanem Abdellatif, Marwan Kobtan, Mostafa Zeinelabdein, Ramina Pashaee
The study examines the role of development finance theory, stakeholders’ theory, creating shared value (CSV), and the triple bottom line (TBL) framework to advance the Sustainable Development Goals (SDGs). Most studies focus on sustainable Business Models (SBMs) from the perspective of developed countries and often overlook the interdisciplinary nature and peculiarities of emerging economies, in terms of technology opportunities, financing constraints, and governance challenges, in the Global South. This study proposes a multi-layered framework to advance economic sustainability in emerging economies by integrating blended green finance, public-private partnerships (PPP), and fintech-enabled SBMs. The multi-layered framework redefines traditional PPP as a collaborative delivery and governance mechanism involving public, private, and development multilateral organizations to implement Economic, Social, Governance (ESG), and climate-aligned infrastructure. It also reshapes the role of blended finance strategies and emphasizes the often-overlooked role of non-banking financial institutions (NBFIs); particularly leasing companies, small and microfinance institutions, alongside banks in enabling inclusive green finance, and incorporates financial technology (FinTech) innovations, including decentralized finance (DeFi), blockchain, and digital crowdfunding, to improve access to capital, and financial inclusion. Tailored to the context of MENA economies, like Egypt's Vision 2030, the framework offers policy insights and a smooth transition toward sustainable development. Keywords: Economic Sustainability, Green Finance, Blended Finance, Public-Private Partnerships (PPP), Fintech-Enabled Sustainable Business Models, Economic, Social, Governance (ESG), Egypt Vision 2030
This article considers the potential of decentralized finance (DeFi) to disrupt global financial stability, highlighting its evolving vulnerabilities and emerging systemic risks. While DeFi has yet to trigger a financial crisis, its rapid growth, increasing complexity, and expanding interconnections with traditional finance (TradFi) suggest that it could become a channel for financial instability under stress conditions. While DeFi inherits certain vulnerabilities of TradFi, its reliance on decentralized governance, algorithmic execution, and volatile collateral arrangements generates distinct risk dynamics. The article places a critical emphasis on stablecoins, whose structural fragilities and liquidity mismatches may amplify contagion effects in times of market stress. The article also examines the limitations of built-in risk mitigation mechanisms, such as overcollateralization and automated liquidation, which, in the absence of legal safeguards or supervisory oversight, may not be sufficient to prevent market-wide disruptions. To mitigate the threat that DeFi may pose to financial stability, this article identifies two regulatory priorities: enhancing monitoring and supervision of DeFi’s evolution and fostering international cooperation to mitigate transmission risks inherent in the DeFi ecosystem.
This research paper analyzes the dynamic and transformative realm of crypto currencies, with a primary focus on their technological foundations, economic implications, and regulatory challenges. Beginning with an examination of the genesis and evolution of prominent crypto currencies, particularly Bit coin, the study delves into the decentralized nature and cryptographic principles that underpin these digital assets. Beyond their role as alternative forms of currency, the research investigates the broader impact of Block chain technology, unraveling its applications across diverse industries. Economic considerations form a pivotal part of the analysis, focusing on financial inclusion, the emergence of decentralized finance platforms, and the innovative concept of non-fungible tokens. The paper scrutinizes the regulatory landscape surrounding crypto currencies, exploring the varied approaches adopted globally and the resulting implications for market participants. In addressing the challenges associated with crypto currencies, including scalability concerns, environmental sustainability, and market volatility, the research offers a nuanced perspective on the intricacies of this evolving ecosystem. Through this comprehensive exploration, the paper contributes valuable insights for academics, policymakers, and industry stakeholders, fostering a deeper understanding of the multifaceted dynamics inherent in the world of crypto currencies. The regulatory landscape for crypto currencies is dynamic and varies globally. Some jurisdictions embrace these digital assets, formulating comprehensive frameworks to balance innovation with investor protection, while others adopt a cautious or restrictive approach due to concerns about volatility and illicit activities. The regulatory challenges include the need for international collaboration and harmonization to address the cross-border nature of crypto currencies.
Olha Kovalchuk, Ruslan Shevchuk, Serhiy Banakh, N. P. Holota · 6 authors
Abstract This study examines the relationships between national cryptocurrency regulation, anti-money laundering (AML) risks, and decentralized finance (DeFi) adoption across global jurisdictions. Using correspondence analysis, correlation techniques, and regression modeling with control variables, we analyze data from the Basel AML Index and Retail DeFi Rankings to identify structural patterns in the interaction between regulatory frameworks, institutional quality, and digital asset ecosystems. The results reveal a counterintuitive global distribution in which advanced economies with strong regulatory regimes and low AML risks tend to exhibit limited retail DeFi activity, whereas jurisdictions characterized by weaker institutions and higher money laundering risks show significantly higher levels of DeFi usage. Further, the correspondence analysis identifies three distinct clusters of countries defined by specific configurations of regulatory approaches, AML effectiveness, and DeFi adoption, indicating that these relationships are configurational rather than purely linear. Robustness checks demonstrate that qualitative features of regulatory regimes are more strongly associated with DeFi adoption than conventional quantitative indicators of economic development or governance quality, thereby distinguishing DeFi diffusion from broader cryptocurrency usage dynamics. Mediation analysis provides partial support for a compensatory pattern: financial inclusion is a significant negative predictor of DeFi adoption, though a statistically confirmed mediation pathway between AML risk and DeFi activity through financial exclusion was not established. The study also highlights substantial global regulatory fragmentation, with 57% of jurisdictions classified as “Undecided” or “Improving,” underscoring the ongoing difficulty of reconciling financial innovation with stability and risk mitigation. These findings provide evidence-based guidance for policymakers designing adaptive regulatory frameworks and establish a foundation for further research on the evolution of digital finance regulation.
Decentralized Finance (DeFi) represents an emerging financial ecosystem that offers services such as lending, investing, and trading without traditional intermediaries like banks or financial institutions. Unlike conventional financial systems, users interact directly with software programs called smart contracts that encode financial logic and automate service delivery. This novel ecosystem promises transparency through public blockchain ledgers that make all transactions visible and inclusion through open access that eliminates traditional barriers to financial participation. Additionally, DeFi enables decentralized governance where users participate in protocol decision-making, and smart contracts facilitate advanced financial engineering through compositional service integration. However, despite these technical innovations, DeFi introduces significant challenges related to transaction complexity, governance concentration, and cybersecurity vulnerabilities that undermine its foundational promises. This thesis develops computational methods to systematically investigate these challenges in Decentralized Finance through empirical analysis of blockchain data. First, to address the complexity of DeFi compositions, we developed an algorithm that extracts fundamental building blocks from individual transactions, revealing recurring patterns and hidden interdependencies between financial services and assets that manual analysis cannot capture at scale. Second, we applied network analysis techniques and introduced novel measurements to examine the governance structures of decentralized applications, focusing on contributors with development and administrative roles. Our analysis revealed common voting patterns and centralized decision-making that contradict claims of decentralized governance. Third, we adapted a difference-in-differences statistical framework to quantify the economic impact of cybercrime on governance tokens, demonstrating that indirect effects on prices and trading volumes significantly exceed the direct losses suffered by immediate victims. These computational methods collectively provide the first systematic, large-scale analytical framework for empirically investigating DeFi ecosystems, revealing fundamental gaps between theoretical promises of transparency and inclusion and practical realities. The findings have significant implications for researchers, policymakers, and practitioners by establishing evidence-based approaches to measuring decentralization claims and systemic risks in blockchain-based financial systems.
Ahmad Ahmad, Muhammad Said, Abdillah Abdillah, Abdulloh Munir
The rapid expansion of Decentralized Finance (DeFi), powered by blockchain technology, has transformed global financial systems by offering peer-to-peer, intermediary-free services. However, its compatibility with Islamic economic law (hukum ekonomi syariah) remains uncertain due to potential violations of Sharia principles such as the prohibition of riba (usury), gharar (excessive uncertainty), and maysir (speculation). This study addresses this gap by employing a qualitative maqāṣid al-sharī‘ah-based analysis to assess the alignment of DeFi mechanisms decentralized exchanges, lending protocols, and smart contracts with Islamic ethical and legal values. Data were collected through literature review and document analysis from classical Islamic sources, fatwas, and current DeFi documentation. The findings show that while many DeFi practices contain non-compliant elements, their underlying technology particularly smart contracts and decentralized governance holds significant potential for adaptation. When structured using Sharia-compliant contracts such as murābaḥah, mushārakah, or wakālah, and guided by maqāṣid objectives like ḥifẓ al-māl (preservation of wealth) and ḥifẓ al-dīn (preservation of faith), DeFi can support financial inclusion, transparency, and justice in accordance with Islamic law. This study proposes a normative framework for building Sharia-compliant DeFi platforms, integrating technical innovations with ethical governance, thereby offering a transformative model for Islamic finance in the digital era.
Andi Aidir Arsy, Dewi Salmita, Muhammad Syafaat, Noval · 5 authors
Purpose - This study examines the association between regional investment, leverage, and regional financial independence within the fiscal decentralization framework. Design/methodology/approach - A quantitative associative approach is employed using pooled panel data from 13 regency and municipal governments in Central Sulawesi Province during 2018–2024. The relationships among variables are analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM) with WarpPLS. The analysis is grounded in fiscal decentralization theory and agency theory to explain local government financial management behavior. Finding/Results – The results indicate that regional investment and leverage are positively and significantly associated with regional financial independence in the pooled PLS-SEM model. Long-term investment is related to stronger fiscal capacity, while leverage may serve as a supportive financing instrument when managed prudently. Together, both variables explain a moderate proportion of the variation in regional financial independence. Originality/Value - This study contributes empirical evidence on how regional investment and leverage are linked to local fiscal autonomy in Central Sulawesi, an underrepresented provincial context in Indonesian local government finance studies. The findings provide practical insights for local governments to improve productive long-term investment and maintain prudent liability management. This study is limited to one province and two explanatory variables; therefore, future research may expand regional coverage and include governance quality, revenue effectiveness, transfer dependence, and expenditure efficiency.
The article examines the economic essence of asset tokenization as a new form of microeconomic relations in the context of financial market digitalization. The existing approaches to interpreting the concept of "asset tokenization" in domestic and foreign scientific literature are generalized, and the author's definition of this economic category is proposed as an institutional-technological mechanism for digitalizing property rights that forms a new architecture of microeconomic relations among market participants. The existing approaches to the classification of tokenized assets are analyzed, in particular the regulatory approach of the U.S. Securities and Exchange Commission (SEC) and the approach of the Financial Stability Board (FSB) based on the reference asset category. On the basis of their critical analysis, the author proposes a multidimensional classification of tokens according to six criteria: functional purpose, role in decentralized finance, method of collateralization, nature of issuance, fungibility, and jurisdictional characteristic. The microeconomic effects of asset tokenization are systematized, encompassing five interrelated groups: structural effects (fractionalization of property rights, disintermediation, formation of new market structures), transactional and price effects (reduction of transaction costs, improvement of asset liquidity), behavioral effects (transformation of incentives and decision-making patterns of economic agents), market equilibrium effects (expansion of supply and demand), and network effects (economies of scale, risks of market fragmentation). It is established that these effects are interconnected and collectively form a new microeconomic environment for the functioning of financial markets.
The current research is about the financing of school participatory structures, particularly FC / CGDES and CGDES in the commune of Droum, Niger Republic. It essentially aims at determining the explanatory factors of financial gap of these structures that are partnership frameworks between the State, development partners, schools, families and community. To do this, both qualitative and quantitative data have been collected across the questionnaire, the snowball technique, the direct observation. Our analyzes showed the existence of factors which created a financial lack directly hindering the achievement of activities of these structures within schools. Added to this, are internal and external parameters including the reluctance of parents linked to their bad connotation of school of white, local actors strategies of co-optation, etc. The whole of these factors determined the low mobilization of funds for the financing of these structures in Droum.
Contemporary quantum physics stands at a historic juncture where technological breakthroughs are transitioning into civilizational applications. The five frontier fields—quantum computing, quantum finance, quantum communication, quantum biology, and quantum gravity—are advancing rapidly, yet they lack a decentralized, quantifiable governance framework to guide their development. This paper announces the quantum leap of Prim-Lex theory (Economic Climatology) from a “diagnostic” to a “therapeutic” science, proposes the Prim-Lexon hypothesis, and expresses the complexified unified field of the five models, thereby establishing a mathematical framework of the mutual generation and restraint of the Five Elements. This paper demonstrates that the five models of Prim-Lex theory (REMC·Fire, CLL·Metal, GCSOS·Water, RCE‑B/S·Wood, G‑REMI·Earth) exhibit a profound structural isomorphism with the five frontiers of contemporary quantum physics. The complexified Prim-Lex theory does not seek to replace existing quantum physics theories; rather, it provides a decentralized civilizational orientation and governance language, ensuring that quantum technologies serve Earth’s civilization in an orderly manner within planetary boundaries.
The European Union faces a structural confidence crisis in 2026, characterised by stagnating Eurozone growth (below 1.2%), deepening North–South fiscal tensions, East–West security divisions, and a fundamental redefinition of the transatlantic security relationship. Existing centralised coordination mechanisms have proven too slow and insufficiently adaptive to manage these simultaneous pressures. This paper introduces the European Octopus Model — a strategic geopolitical framework that reconceives EU governance through four geographically specialised "legs" (South, East, North, West), each leveraging its proximate regional environment, coordinated by a single AI-powered digital governance platform: the European Octopus Coordination Council (EOCC). The model adopts a Direct Benefit First principle (70% of project returns to the executing state; 30% to a collective fund), supported by a self-financing Hybrid Crisis Reserve Fund and a network of four Strategic Industrial Cities operating as Special Economic Zones. The framework is grounded in the Global Reflection Economic Theory (GRE), which treats institutional trust as a measurable economic asset and positions citizen co-production — rather than top-down institutional imposition — as the primary driver of sustainable productivity. Quantitative projections, drawing on IMF, IEA, ECB, and Eurostat baselines, suggest that full model implementation could raise Eurozone GDP growth to 1.7–1.9% by 2027 and 2.0–2.3% by 2028, against a baseline of 1.0–1.2%. The paper further provides a three-scenario comparative analysis, a 2026–2028 implementation roadmap, and an honest assessment of governance transition risks. "This framework builds upon and complements my previous geopolitical analysis developed in 'Europe in the Dark Decade' (Sara B., 2025)"
This article explores the theoretical discourse on managing public finances (PF) of territorial communities (TCs) in Ukraine under conditions of politico-economic uncertainty and ongoing conflict. It examines the role of PF in addressing societal needs, ensuring economic viability, and promoting financial autonomy within the decentralization framework. Public finances are defined as a system of economic relations encompassing the formation, distribution, and utilization of centralized and decentralized funds to fulfill public interests, aligning with legislative priorities. The study analyzes PF components, including local budgets, communal enterprise revenues, credit resources, and targeted funds, emphasizing transparency in line with IMF fiscal transparency recommendations. The reinstatement of medium-term budget planning through the Budget Declaration for 2025–2027 enhances financial discipline and policy predictability, despite challenges posed by prolonged conflict and defense spending. It is argued that continuing reforms in the financial sector should facilitate the creation of a foundation for sustainable growth in the future, while reforms in public finance, particularly in optimizing expenditures in education and healthcare, will help effectively manage increasing defense-industrial costs, boost tax revenues, and strengthen fiscal discipline and economic efficiency. The banking sector's stability, supported by robust capital and liquidity, fosters economic growth by facilitating credit access for TCs. Suggested strategies for improving PF management, such as income diversification, fiscal consolidation, and strategic planning to mitigate systemic risks. Harmonization with EU financial regulations strengthens competitiveness and attracts foreign investment. The research highlights the importance of public-private partnerships and alternative financing sources like grants and loans to ensure TC resilience. Future studies should focus on overcoming challenges such as limited tax bases, dependency on transfers, and adapting financial strategies to wartime constraints, contributing to sustainable socio-economic development of TCs.
The evolution of the state’s role in digital finance from a passive observer to an active regulator and a full participant in the digital market has been studied. With the rapid tokenization of assets, the traditional financial system is facing unprecedented challenges caused by decentralization, anonymity of operations, large-scale regulatory arbitration, and the threat of laundering illegal income in the new digital environment. A comprehensive analysis of the digital financial instruments structure has been provided, and the potential of their impact on the global and national economies has been assessed. Particular attention has been paid to the risks of decentralized finance, including threats to monetary sovereignty and the challenges of using smart contracts. The paper examines the foreign and Russian experience of the crypto industry regulation, demonstrating a global trend away from strict prohibitions towards creating comprehensive legal regimes. The practical cases of various states have been analyzed, reflecting their strategies of adaptation to new digital technologies. The trend towards involving central banks in the digitalization process by developing their own digital currencies as a legitimate alternative to private crypto assets has been highlighted. It has been concluded that it is necessary to find a sound balance between stimulating technological in novation and ensuring national economic security
This paper analyses the World Bank initiatives in promoting its role in decentralizing climate finance through the Financing Locally-Led Climate Action (FLLoCA) and the Kenya Climate-Smart Agriculture Project (KCSAP) in Lamu County, Kenya. A qualitative case study is used to examine the substantial tension between the Bank's perception of its institutional function, its actual bureaucratic performance, and the pressing demands, through the intersection of Function of Role Theory and Climate Resilience Theory. A significant implementation gap is revealed from the empirical findings, highlighting that the creation of the local ward committees in the projects purportedly regularizes climate governance. However, the strict procurement regulations provided by the Bank, systemic delays in the release of funds, and strict environmental standards have compromised local sovereignty. Misplaced expectations are frequently encounters through these efforts and the occurrence of elite capture, hindering marginalized groups from cultivating genuine and transformative resilience. This paper concludes that the international development finances must abandon rigid technological imposition in favour of adaptable funding models and genuinely integrate local survival knowledge to thrive in extremely fragile socio-ecological zones.
Open access
Sustainability and Climate Change Governance
Conservation, Biodiversity, and Resource Management
Cordyceps militaris is a high-value medicinal mushroom known for its bioactive compounds, including cordycepin and polysaccharides, which have driven demand for scalable and economically efficient cultivation systems. This study presents an integrated techno-economic analysis (TEA) of Cordyceps production in modular shipping-container units under two operational strategies: (i) a centralized system with on-site substrate and spawn preparation, and (ii) a decentralized system relying on commercially produced spawn at a single grow-only site. Red rice was used as the cultivation substrate at two production scales (50 and 100 lb/day) and evaluated using a five-year financial model that incorporated capital expenditure (CapEx), operating expenditure (OpEx), revenue, net cash flows, discounted cash flows, and net present value (NPV). The model assumed 80% debt and 20% equity financing, a WACC of 6.48%, and a 30% corporate tax rate. GHG emissions were quantified within a farm-gate boundary encompassing electricity consumption, CO 2 from mushroom respiration, and raw material transportation. Centralized systems required higher initial CapEx ($212,232 and $375,408) but benefited from substantially lower raw-material costs, resulting in superior operating margins and annual cash flows. In contrast, decentralized systems incurred two-to three-fold higher substrate-related costs, which constrained profitability despite lower upfront capital requirements. As a result, centralized systems achieved significantly higher NPVs and shorter payback. Sensitivity analysis confirmed that the selling price and biological efficiency are the dominant drivers of NPV, while the electricity price has minimal influence across all scenarios. Centralized container-based production offers a more economically viable and scalable pathway for commercial Cordyceps cultivation.