Defi for the Poor

Defi for the Poor

• Assistant Professor of Analytics Andrew Kumiega

Abstract:

In DeFi, consumers’ financial transactions such as lending, borrowing, swaps, investing in firms, and yield farming mainly focus on wealth creation. The consumer is considered financially sophisticated enough to understand and manage the financial risk of fraud and counterparty default. Unfortunately, this approach has been tried often before and has regularly led to financial problems that have harmed society. We discuss the ethical implications of a DeFi world where all financial institutions are regulation free. The study concludes that DeFi is simply a new electronic financial system that countries should not prohibit, as long as existing consumer safeguards is built into the new platforms.

Keywords: Financial crisis, Securitization, Regulation, and Supervision, Safety Nets, Decentralized Finance (DeFi), Blockchain

All Illinois Tech faculty, students, and staff are invited to attend.

The Friday Research Presentations series showcases ongoing academic research projects conducted by Stuart School of Business faculty and students, as well as guest presentations by Stuart alumni, Illinois Tech colleagues, business professionals, and faculty from other leading business schools.