THE POTENTIAL OF WEB3 REGARDING DECENTRALIZED FINANCE - DEFI
In: Journal of public administration, finance and law, Band 30, S. 243-250
ISSN: 2285-3499
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