ABSTRACT
This work contributes to architectural and economic understanding of a largely unexplored field of blockchain-based applications referred to as Decentralised Finance (DeFi). Merging technical and economic perspectives, we define DeFi as an ecosystem of decentralised applications which is built on top of permissionless smart contract platforms to mimic and extend traditional financial services. We frame DeFi as a research object in information systems (IS) and management-related platform literature. Further, we conceptualise DeFi as a platform economy within software ecosystems and in interdependence with exogenous factors. This enables us to identify three promising avenues for future research: (i) base layer blockchains as a platform for developers, (ii) the dApp economy of platform modules, and (iii) the diffusion and adoption of DeFi.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Additional information
Notes on contributors
Benedikt C. Eikmanns
Benedikt Eikmanns is doctoral candidate (Ph.D. candidate) at Technical University of Munich specialized in the economic evaluation of blockchain technology. Besides DeFi and platform business models, his research interests are in the areas of the token economy, central bank digital currency (CBDC), and entrepreneurial finance.
Pascal Mehrwald
Pascal Mehrwald is a doctoral candidate (Ph.D. candidate) at the Technical University of Munich and startup advisor. He is specialized on the effect of distributed ledger technology applications in different industries, DeFi, entrepreneurial finance and the token economy.
Philipp G. Sandner
Prof. Dr. Philipp Sandner has founded the Frankfurt School Blockchain Center (FSBC). In 2018 and in 2019, he was ranked as one of the “top 30” economists by the Frankfurter Allgemeine Zeitung (FAZ), a major newspaper in Germany. Since 2017, he is a member of the FinTech Council of the Federal Ministry of Finance in Germany.
Isabell M. Welpe
Prof. Dr. Isabell Welpe is a full professor at the Technical University of Munich and head of the Chair for Strategy and Organization and co-founder of the TUM blockchain center. Her research focuses on digital transformation and business model innovation, and the role of emerging technologies for organizations and society.