Research Topic

Towards the Foundations of Decentralized Finance

About this Research Topic

Decentralized Finance (DeFi) has become the latest growth area in the blockchain space. Numerous experiments are being undertaken in accelerated real time. DeFi hopes to develop the tools necessary to provide consumer finance to the crypto-economy and to develop the risk management tools that underpin a crypto-economy. Traditional finance has long had instruments and institutions to provide these tools to the non-crypto economy. What theories, policies and practices are readily transferable to a crypto-economy and why are they transferable? What differences need to be accommodated between traditional finance and DeFi? What is missing from this fast-moving space is deeper understanding that comes from theory development. Sound principles and basics can inform the next generation of industry experimentation, but now those principles and basics need to be developed in a rigorous framework.

Merton Miller famously said that there was nothing more practical than good theory. What is lacking in the DeFi space is good theory. There are many ‘learnings’ and trial and error results of experimentation but there is no coherent framework to anchor and organize our thinking in the DeFi space. This Research Topic seeks submissions which propose theoretical frameworks and also empirical tests of those frameworks to advance knowledge. Much of the current research is empirically driven and advances our understanding of technique, but not knowledge of DeFi per se. This Research Topic will address that gap in our knowledge and understanding of DeFi. The following are suggested as topics of interest:

• Papers that develop theoretical ideas and provide empirical tests of that theory are particularly welcome.
• Application of Markowitz portfolio theory to crypto-assets.
• Development of crypto-asset pricing theory.
• Application of Fama-efficient markets theory to crypto-assets and DeFi products.
• Development of financial governance theory to crypto-assets and DeFi products.
• Pricing of defi products.
• Development of derivative market principles in the crypto-space and DeFi.

Topic Editor Vijay Mohan is Director of the company Lattice Analytics Pty Ltd. Topic Editor Vijaya Bhaskar Marisetty has received research funding from the company Synchrony IT. The other Topic Editors declare no competing interests with regard to the Research Topic subject.


Keywords: DeFi, Digital Finance, Smart Contracts, Social Impact, Blockchain


Important Note: All contributions to this Research Topic must be within the scope of the section and journal to which they are submitted, as defined in their mission statements. Frontiers reserves the right to guide an out-of-scope manuscript to a more suitable section or journal at any stage of peer review.

Decentralized Finance (DeFi) has become the latest growth area in the blockchain space. Numerous experiments are being undertaken in accelerated real time. DeFi hopes to develop the tools necessary to provide consumer finance to the crypto-economy and to develop the risk management tools that underpin a crypto-economy. Traditional finance has long had instruments and institutions to provide these tools to the non-crypto economy. What theories, policies and practices are readily transferable to a crypto-economy and why are they transferable? What differences need to be accommodated between traditional finance and DeFi? What is missing from this fast-moving space is deeper understanding that comes from theory development. Sound principles and basics can inform the next generation of industry experimentation, but now those principles and basics need to be developed in a rigorous framework.

Merton Miller famously said that there was nothing more practical than good theory. What is lacking in the DeFi space is good theory. There are many ‘learnings’ and trial and error results of experimentation but there is no coherent framework to anchor and organize our thinking in the DeFi space. This Research Topic seeks submissions which propose theoretical frameworks and also empirical tests of those frameworks to advance knowledge. Much of the current research is empirically driven and advances our understanding of technique, but not knowledge of DeFi per se. This Research Topic will address that gap in our knowledge and understanding of DeFi. The following are suggested as topics of interest:

• Papers that develop theoretical ideas and provide empirical tests of that theory are particularly welcome.
• Application of Markowitz portfolio theory to crypto-assets.
• Development of crypto-asset pricing theory.
• Application of Fama-efficient markets theory to crypto-assets and DeFi products.
• Development of financial governance theory to crypto-assets and DeFi products.
• Pricing of defi products.
• Development of derivative market principles in the crypto-space and DeFi.

Topic Editor Vijay Mohan is Director of the company Lattice Analytics Pty Ltd. Topic Editor Vijaya Bhaskar Marisetty has received research funding from the company Synchrony IT. The other Topic Editors declare no competing interests with regard to the Research Topic subject.


Keywords: DeFi, Digital Finance, Smart Contracts, Social Impact, Blockchain


Important Note: All contributions to this Research Topic must be within the scope of the section and journal to which they are submitted, as defined in their mission statements. Frontiers reserves the right to guide an out-of-scope manuscript to a more suitable section or journal at any stage of peer review.

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Submission Deadlines

21 July 2021 Manuscript

Participating Journals

Manuscripts can be submitted to this Research Topic via the following journals:

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Topic Editors

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Submission Deadlines

21 July 2021 Manuscript

Participating Journals

Manuscripts can be submitted to this Research Topic via the following journals:

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