Impact of social metrics in decentralized finance

Chousa, Juan Piñeiro; Šević, Aleksandar; González-López, Isaac

doi:10.1016/j.jbusres.2023.113673

Cited by 10 publications

(3 citation statements)

References 58 publications

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“…CeFi offers crypto services within a centralized structure [2,33]. Platforms like Binance, Coinbase, Gemini, Kraken, and Nexo serve as these intermediaries, providing services like fiatto-crypto conversion and customer support.…”

Section: Tradfi and Cefimentioning

confidence: 99%

A Review on Decentralized Finance Ecosystems

Alamsyah,

Kusuma,

Ramadhani

2024

Future Internet

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The future of the internet is moving toward decentralization, with decentralized networks and blockchain technology playing essential roles in different sectors. Decentralized networks offer equality, accessibility, and security at a societal level, while blockchain technology guarantees security, authentication, and openness. Integrating blockchain technology with decentralized characteristics has become increasingly significant in finance; we call this “decentralized finance” (DeFi). As of January 2023, the DeFi crypto market capitalized USD 46.21 billion and served over 6.6 million users. As DeFi continues to outperform traditional finance (TradFi), it provides reduced fees, increased inclusivity, faster transactions, enhanced security, and improved accessibility, transparency, and programmability; it also eliminates intermediaries. For end users, DeFi presents asset custody options, peer-to-peer transactions, programmable control features, and innovative financial solutions. Despite its rapid growth in recent years, there is limited comprehensive research on mapping DeFi’s benefits and risks alongside its role as an enabling technology within the financial services sector. This research addresses these gaps by developing a DeFi classification system, organizing information, and clarifying connections among its various aspects. The research goal is to improve the understanding of DeFi in both academic and industrial circles to promote comprehension of DeFi taxonomy. This well-organized DeFi taxonomy aids experts, regulators, and decision-makers in making informed and strategic decisions, thereby fostering responsible integration into TradFi for effective risk management. This study enhances DeFi security by providing users with clear guidance on existing mechanisms and risks in DeFi, reducing susceptibility to misinformation, and promoting secure participation. Additionally, it offers an overview of DeFi’s role in shaping the future of the internet.

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Section: Tradfi and Cefimentioning

confidence: 99%

A Review on Decentralized Finance Ecosystems

Alamsyah,

Kusuma,

Ramadhani

2024

Future Internet

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“…DefiLlama is an established platform that has gained a reputation as a reliable source of DeFi data and has been cited in numerous academic and industry publications [22]. DefiLlama reports on the treasuries of 125 DAOs, breaking down the assets into categories of stablecoins, major cryptocurrencies such as BTC and ETH, the DAO's native governance token, and other assets [4].…”

Section: Current Reporting Practices Of Dao Treasuriesmentioning

confidence: 99%

Towards Fair Presentation of DAO Treasuries: An Evaluation of Native Governance Token Reporting Practices

Schoonwinkel

2023

The JBBA

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Decentralised Autonomous Organisations (DAOs) are rapidly gaining popularity in the blockchain ecosystem. Given the widespread use of reported data to make informed decisions related to these entities, it is imperative to address the lack of reporting guidance for key metrics of DAOs. Currently, any governance tokens minted but not yet distributed by the DAO is recorded as an asset held in the DAO's treasury. As the value attributed to these undistributed tokens is material, poor reporting practices of this economic phenomenon would negatively impact the decisions made by users of this information. This study undertakes a qualitative nonempirical investigation to evaluate the reporting practice of recording native governance tokens held in DAO treasuries. The study identifies the reporting practices by examining websites that report on DAO treasuries, and the practice found is evaluated against the International Financial Reporting Standards (IFRS) to ensure fair presentation. The results of the study reveal that the current practice of recording all native governance tokens held as assets in the treasury fails to achieve fair presentation, as many governance tokens might fail the definition of an asset, and some might be required to be measured at cost rather than market value. As a result, the treasuries of DAOs are materially overstated, and investors may be relying on misleading information.

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“…The proliferation of cryptocurrencies 1 coupled with the widespread growth of NFTs (Belk et al, 2022), has catalysed the evolution of a wide range of business models and applications (Malik et al, 2023;Piñeiro-Chousa et al, 2023). The literature has analytically investigated their use-case scenarios, economic implications, and social opportunities.…”

Section: Play-to-earn Games: Axie Infinitymentioning

confidence: 99%

Gamified cryptocurrency and rewards: Consumer behaviour during uncertain earnings

Ahsan,

Gupta

2023

J of Consumer Behaviour

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The accentuation of cryptocurrency, non‐fungible tokens and gamification of platforms has led to rewards being awarded, in the form of cryptocurrencies, that are formed by the platforms themselves and traded over the marketplace. These play‐to‐earn gamified platforms have witnessed a rise in participation, leading to increased investments by consumers, engagement, threats, and subsequent volatility. This paper tries to decipher consumer behaviour over the nascent gamified platform of a play‐to‐earn game, Axie Infinity, due to its fluctuating and subsequent depreciation of cryptocurrency, that act as rewards. This volatility from the resultant rewards over the platform brings about an uncertainty in the users' engagement, which has been part of our investigation in this study. The data was gathered through semi‐structured interviews of 20 participants picked from the official server of Axie Infinity on the social media platform of Discord. A thematic analysis based on a descriptive phenomenological approach was conducted on this data which generated findings that were centred around the continued use of action and rewards, resolution of participation through accumulation of rewards and optimism. The study contributes by highlighting and substantiating the component of optimism in the theory of reinforcement‐uncertainty, that characterises repetitive uncertain events, specifying it for uncertain rewards over investment risks that have been undertaken by consumers. Based on these findings, this study discusses how optimism is crucial in the continuation of engagement and outlines how it can be used in the facilitation of positive consumer behaviour over a gamified platform.

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Impact of social metrics in decentralized finance

Cited by 10 publications

References 58 publications

A Review on Decentralized Finance Ecosystems

A Review on Decentralized Finance Ecosystems

Towards Fair Presentation of DAO Treasuries: An Evaluation of Native Governance Token Reporting Practices

Gamified cryptocurrency and rewards: Consumer behaviour during uncertain earnings

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