Smart Contracts and DeFi Protocols: Enhancing...

Smart Contracts and DeFi Protocols: Enhancing Security, Transparency, and Efficiency in Financial Transactions

Author Name : Narendra Kandregula

ABSTRACT The recent developments within the financial space lie primarily in smart contracts and decentralized finance (DeFi) platforms, owing to the innovative essence of blockchain technology. This paper explores the various implications of such technologies, focusing on how they impact the enhancement of security, transparency, and efficiency of financial transactions. Hybrid access agreements are referred to as smart contracts. Since the terms of smart contracts are coded, a third party is not required to monitor compliance to ensure that the terms set are observed or to avoid a breach of contract in the process. Not only does it increase the speed of transactions, but it also decreases operations and makes services more affordable. DeFi services use smart contacts, allowing participants to participate in lending, borrowing, and staking services. As a result, decentralized finance platforms give individuals direct access to investment instruments, thus allowing complex financial maneuvers that would have been done solely by larger investors in a previous age. This open and permissionless sector of DeFi is a breeding ground of innovation and competition, and it sets up these many products and services to satisfy various users' requirements.