{"id":541164,"date":"2023-01-20T00:50:59","date_gmt":"2023-01-19T21:50:59","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bis-proposes-research-model-to-study-defis-integration-with-tradfi-and-its-risks\/"},"modified":"2023-01-20T00:50:59","modified_gmt":"2023-01-19T21:50:59","slug":"bis-proposes-research-model-to-study-defis-integration-with-tradfi-and-its-risks","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bis-proposes-research-model-to-study-defis-integration-with-tradfi-and-its-risks\/","title":{"rendered":"# BIS proposes research model to study DeFi\u2019s integration with TradFi and its risks"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a295ab03a290\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a295ab03a290\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/bis-proposes-research-model-to-study-defis-integration-with-tradfi-and-its-risks\/#%E2%80%9D_BIS_proposes_research_model_to_study_DeFis_integration_with_TradFi_and_its_risks_%E2%80%9C\" >&#8221; BIS proposes research model to study DeFi\u2019s integration with TradFi and its risks  &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_BIS_proposes_research_model_to_study_DeFis_integration_with_TradFi_and_its_risks_%E2%80%9C\"><\/span>&#8221; BIS proposes research model to study DeFi\u2019s integration with TradFi and its risks  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDEvNGQyMWM1N2EtM2JjZC00ZGM5LWFjZWMtNDM5YWFkMTIzOWRmLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a4050f8>The Bank for International Settlements looked under the hood of decentralized finance (DeFi) in a new working paper and introduced the DeFi stack reference (DSR) model to illustrate the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>\u2019s functionality and risks. The report discussed the integration of DeFi with traditional finance and suggested ways to assess its risks during that integration.<\/p>\n<p>The paper <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bis.org\/publ\/work1066.pdf\">examined<\/a> the architecture, technical primitives and functionalities of DeFi protocols in considerable technical detail. \u201cA deep understanding of DeFi is still lacking in many circles,\u201d the authors wrote, \u201cwhich calls for a specific framework for an improved working knowledge of the technology.\u201d <\/p>\n<p>The effort is worthwhile, the paper argued, because of DeFi\u2019s innovation: <\/p>\n<blockquote><p>\u201cIt is still unclear if and to what extent DeFi will proliferate in the future. [\u2026] Nevertheless, we consider DeFi a relevant development because it harnesses innovative technology that might shape the future financial ecosystem.\u201d <\/p><\/blockquote>\n<p>Algorithmic automation, \u201ccompetitive financial engineering\u201d and transparency \u201care of interest well beyond cryptocurrency markets,\u201d the paper said. By competitive engineering the authors meant composability, the combining of smart contracts to form complex and unique financial products.<\/p>\n<p>The DSR model divides DeFi into three layers: interface, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lication and settlement, with sublayers allowing for the variation seen across DeFi technologies. The paper used a variety of tokens, blockchains and financial services in its examples. The run on Terra (LUNA) was discussed in detail for its informational value and as an example of the effectiveness of the authors\u2019 investigation technique. <\/p>\n<p><strong><em>Related: Bank for International Settlements will test DeFi implementation in forex CBDC markets<\/em><\/strong><\/p>\n<p>This working paper appeared the same week as the World Economic Forum (WEF) released an overview of decentralized autonomous organizations. The two works are highly complementary, as the WEF publication was equally comprehensive but nontechnical. <\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/DeFi?src=hash&amp;ref_src=twsrc%5Etfw\">#DeFi<\/a> is a programmable financial ecosystem that lets users trade, lend and invest without relying on a central inter<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>ry. This paper deep dives into the underlying technology, its economic potential and the related risks <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/NLkvja6Not\">https:\/\/t.co\/NLkvja6Not<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/Ethereum?src=hash&amp;ref_src=twsrc%5Etfw\">#Ethereum<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/blockchain?src=hash&amp;ref_src=twsrc%5Etfw\">#blockchain<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/DLT?src=hash&amp;ref_src=twsrc%5Etfw\">#DLT<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/EnccGmmf93\">pic.twitter.com\/EnccGmmf93<\/a><\/p>\n<p>\u2014 Bank for International Settlements (@BIS_org) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/BIS_org\/status\/1616065473174540289?ref_src=twsrc%5Etfw\">January 19, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The BIS regularly takes part in central bank digital currency research. It has taken a highly cautious stance on cryptocurrency. It recently imposed a 2% ceiling on crypto assets in reserves of internationally active banks, effective Jan. 1, 2025.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/bis-proposes-research-model-to-study-defi-s-integration-with-tradfi-and-its-risks\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; BIS proposes research model to study DeFi\u2019s integration with TradFi and its risks &#8220; The Bank for International Settlements looked under the hood of decentralized finance (DeFi) in a new working paper and introduced the DeFi stack reference (DSR) model to illustrate the technology\u2019s functionality and risks. The report discussed the integration of DeFi&#8230;<\/p>\n","protected":false},"author":1,"featured_media":541165,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/cdn-cgi\/image\/format=auto,onerror=redirect,quality=90,width=1200\/https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/4d21c57a-3bcd-4dc9-acec-439aad1239df.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74983,74355],"class_list":["post-541164","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-decentralization","tag-adoption"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/541164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=541164"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/541164\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/541165"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=541164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=541164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=541164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}