The paper provides an overview of cryptocurrencies and decentralized finance (DeFi). The discussion lays out potential benefits and challenges of the new system and presents a comparison to the traditional system of financial intermediation. Our analysis highlights that while the DeFi architecture might have the potential to reduce transaction costs, similar to the traditional financial system, there are several layers where rents can accumulate due to endogenous constraints to competition. We show that the permissionless and pseudonymous design of DeFi generates challenges for enforcing tax compliance and anti–money laundering laws and preventing financial malfeasance. We highlight ways to regulate the DeFi system which would preserve a majority of benefits of the underlying blockchain architecture but support accountability and regulatory compliance.

本文概述了加密货币和去中心化金融 (DeFi)。讨论列出了新系统的潜在好处和挑战，并与传统的金融中介系统进行了比较。我们的分析强调，虽然 DeFi 架构可能具有降低交易成本的潜力，类似于传统金融系统，但由于竞争的内生约束，租金可以在多个层次上累积。我们表明，DeFi 的无许可和假名设计对执行税收合规和反洗钱法以及防止金融渎职造成了挑战。