Decentralized finance (DeFi) with emphasis on IDOs and its application for SMEs

Subject Areas : business management

Mohammad  Yaghoubi ¹ (Department of Economics, Faculty of Islamic Studies and Economics, Imam Sadegh University (AS), Tehran, Iran)
Matin  Fakhimi Akmal, ² (Department of Economics, Faculty of Islamic Studies and Economics, Imam Sadegh University (AS), Tehran, Iran)
Mahdi  Sadeghi Shahdani, ³ (Department of Economics, Faculty of Islamic Studies and Economics, Imam Sadegh University (AS), Tehran, Iran)

Received: 2021-11-09 Accepted : 2021-12-13 Published : 2022-06-22

Keywords: SMEs, Blockchain, Python, Decentralized Finance, DeFi,

Abstract :

Decentralized finance (DeFi) has been raised in recent years and has experienced significant growth in 2021. DeFi seeks to eliminate intermediaries by using blockchain and to provide all the services in a decentralized manner. DeFi has been able to implement many services of the traditional financial system on the blockchain platform . Also, the financing methods of various industries projects on the blockchain platform before 2021 were mainly Initial Coin Offering (ICO) and Initial Exchange Offering (IEO), but Defi used Initial Decentralized exchange Offering (IDO) by using decentralized exchange that it has added to the methods of financing through blockchain. In the present study, we first consider theoretical basis of DeFi,. Then, to answer the question of which DeFi-related projects and projects in other industries that use the IDO method can be financed through blockchain, use Python language and the pycaret library to apply different classification models. We collected 665 projects data in the ten most widely used blockchain industries listed on the CryptoRank site from 2017 to 2021. The results of the model prediction indicate that DeFi industry projects and projects of other industries that use the IDO method have the ability to finance small-scale financing through blockchain.