Decentralized Finance (DEFI): Opportunities & Challenges In The Era Of Cryptocurrency

Bhargavi Dixit, B.A LL.B., Asian Law College

ABSTRACT

The rapid rise of decentralized finance (DeFi) has transformed the financial landscape, presenting both unprecedented opportunities and complex challenges in the era of cryptocurrency. By utilizing blockchain technology and smart contracts, DeFi aims to decentralize traditional financial instruments and services, promoting financial inclusion, transparency, and accessibility to capital.

DeFi has transformed the financial landscape, presenting both opportunities and challenges in the era of cryptocurrency. This research delves into the multifaceted world of DeFi to explore the potential benefits and hurdles it brings. By utilizing blockchain technology and smart contracts, DeFi aims to decentralize traditional financial instruments and services, promoting financial inclusion, transparency, and accessibility to capital. This study investigates the opportunities DeFi presents in terms of democratizing finance, reducing intermediaries, and fostering innovation. It also examines the challenges faced by DeFi, including security vulnerabilities, regulatory uncertainties, and scalability issues. Additionally, the research analyses the impact of DeFi on traditional financial systems, exploring its potential to disrupt established institutions and reshape the industry. By shedding light on the opportunities and challenges of DeFi, this study contributes to our understanding of the evolving cryptocurrency landscape and its broader implications for the future of finance.

Keywords: cryptocurrency, decentralized finance, DeFi, blockchain, smart contracts, financial inclusion, transparency, accessibility to capital, security vulnerabilities, regulatory uncertainties, scalability, financial disruption.