Decentralized financial model for Ethereum-based lending.

Abstract

The gradual expansion of the impact of the digital economy on financial relations gives rise to new approaches to the tools of means of payment and loanable funds. The article deals with the study of the creation and development of a decentralized financial model and the possibility of its use for lending based on cryptocurrency technology. The aim of the article is to study the features of a decentralized financial model for Ethereum-based lending. The technology of decentralized financing programs (DeFi), which allows turning traditional financial services into services provided without an intermediary through smart contracts on the blockchain, is gradually expanding its capabilities. Decentralization eliminates the need for trusted third parties by reducing the market opportunities of intermediaries obtained through the information advantage they have over the parties to the agreement by using their intermediary services. Currently, most DeFi financial services consist of monetary banking services; providing peer-to-peer lending platforms; providing improved financial instruments such as decentralized exchanges, derivatives markets. The application of blockchain technology in the financial sector has led to the creation of a system capable of reproducing standard financial services and offering innovative solutions for the development of this industry. The blockchain system is Ethereum-based, which is why it is more efficient for the transaction system than other transactions, because it has the technological features of a smart contract, which are related to the last transaction. Finding further options for the use of decentralized finance based on the blockchain capabilities is crucial for the creation of open financial products. If successful, the decentralized finance system will expand Ethereum-based lending capabilities with improved conditions.