Original Research
Volume 2, Issue 2, (2026) Cite this article
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Shivangi Srivastava , Raj Bihari Lal Srivastava
Pages: 1-9
Decentralized Finance (DeFi) has emerged as one of the most disruptive developments in the digital financial ecosystem. DeFi is a blockchain based on smart contracts, which wants to do away with the existing middlemen (banks, brokers, clearing institutions) and allow for peer-to-peer (P2P) financial transactions. DeFi’s emergence has opened up new options such as financial inclusion, transparency, automation, cost reduction and global reach. But the ecosystem also confronts substantial hurdles such as smart contract weaknesses, liquidity hazards, market manipulation, governance issues and regulatory uncertainties. This report evaluates the architecture, prospects, hazards and the shifting regulatory frameworks of the DeFi ecosystem offering a full analysis of the ecosystem. It also analyses evolving worldwide regulatory responses and makes recommendations on how to reconcile innovation and financial stability.
Decentralized Finance, Blockchain, Smart Contracts, Cryptocurrency, Financial Inclusion, Regulation, Financial Stability