Decentralized Finance

Satyajit Bose (), Guo Dong () and Anne Simpson ()
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Satyajit Bose: Columbia University
Guo Dong: Columbia University
Anne Simpson: CalPERS

Chapter Chapter 12 in The Financial Ecosystem, 2019, pp 283-310 from Palgrave Macmillan

Abstract: Abstract We describe the value of decentralized decision-making in the context of the assessment of systemic risks in the financial ecosystem and draw parallels to the lessons learned from the polycentric provision of local public goods. Greater resilience of the ecosystem requires methods of decentralized recruitment and quorum sensing, features that induce rapid optimization without centralized regulation in ecological systems. We describe the potential for recruitment and quorum sensing in two financial applications: securitization and thematic investing. Finally, we consider the potential and pitfalls presented by the use of blockchain and distributed ledgers to specific applications in sustainable finance, including prediction markets, distributed corporate governance, and trade finance.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psifcp:978-3-030-05624-7_12

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DOI: 10.1007/978-3-030-05624-7_12

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