DecentralizedFinance:OnBlockchain-andSmartContract-BasedFinancialMarketsByFabianSchär1INTRODUCTIONDecentralizedfinance(DeFi)isablockchain-basedfinancialinfrastructurethathasrecentlygainedalotoftraction.Thetermgenerallyreferstoanopen,permissionless,andhighlyinteroperableprotocolstackbuiltonpublicsmartcontractplatforms,suchastheEthereumblockchain(seeButerin,2013).Itreplicatesexistingfinancialservicesinamoreopenandtransparentway.Inparticular,DeFidoesnotrelyonintermediariesandcentralizedinstitutions.Instead,itisbasedonopenprotocolsanddecentralizedapplications(DApps).Agreementsareenforcedbycode,transactionsareexecutedinasecureandverifiableway,andlegitimatesta...