The Wharton School
The University of Pennsylvania DeFi Beyond the Hype | 20
Acknowledgments
Lead Author
David Gogel (dYdX)
Project Coordinators
Sumedha Deshmukh (World Economic Forum)
André Geest (Ludwig Maximilian University)
Daniel Resas (Schnittker Möllmann Partners)
Christian Sillaber (University of Bern)
Kevin Werbach (Wharton School, UPenn)
Contributors
Teana Baker-Taylor (Crypto.com)
Ann Sofie Cloots (Cambridge University)
Brendan Forster (Dharma)
Jordan Lazaro Gustave (Aave)
Fabian Schär (University of Basel)
Lex Sokolin (ConsenSys)
Reviewers
Sebastian Banescu (Quantstamp)
Jacek Czarnecki (Maker Foundation)
Charles Dalton (PayPal)
Joyce Lai (New York Angels, NewTerritories.io)
Ashley Lannquist (World Economic Forum)
Xavier Meegan (ING)
Sheila Warren (World Economic Forum)
We use the general term digital asset rather than cryptocurrency, virtual currency, or cryptoasset. Terms may have distinct legal meanings in certain jurisdictions.
https://defipulse.com. Increasing digital asset prices contributed to this rise, but organic growth was also very strong. The number of DeFi wallets grew from
100,000 to 1.2 million during 2020, and new DeFi applications went from eight in 2019 to over 230 in 2020. Exclusive: DeFi Year in Review by DappRadar, The
Defiant (December 28, 2020), https://thedefiant.substack.com/p/exclusive-defi-year-in-review-by-1f2.
See. e,g., Tobias Adrian, John Kiff, and Hyun Song Shin, Liquidity, Leverage, and Regulation 10 Years After the Global Financial Crisis, Annual Review of
Financial Economics 10:1-24 (2018).
See e.g. Laurence Fletcher, Hedge funds rethink after GameStop pain, Financial Times (April 14, 2021), https://www.ft.com/content/f7ddacb6-dc07-4142-adb2-
f7eedf3a2272
Nat Maddrey, Ethereum's DeFi Evolution: How DeFi is Fueling Ethereum's Growth, Coin Metrics (September 29, 2020), https://coinmetrics.io/ethereums-defi-
evolution-how-defi-is-fueling-ethereums-growth/.
Some efforts are underway to catalog and categorize the DeFi landscape, including the ConsenSys DeFi Score (https://defiscore.io/) and Codefi Inspect
(https://inspect.codefi.network/). These use slightly different definitions of DeFi than the one presented here.
Fred Ehrsam, Blockchain Tokens and the Dawn of the Decentralized Business Model, Coinbase Blog, August 1, 2016, https://blog.coinbase.com/app-coins-and-
the-dawn-of-the-decentralized-business-model-8b8c951e734f.
Olga Kharif, Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag, Bloomberg (October 3, 2017), https://www.bloomberg.com/news/articles/2017-
10-03/hedge-funds-flip-icos-leaving-other-investors-holding-the-bag.
2021 Digital Asset Outlook Report, The Block Research, https://www.theblockcrypto.com/post/88463/2021-digital-asset-outlook.
Ethereum is in the midst of transitioning to a new version, Eth2, which promises significant scalability improvements, including replacing energy-intensive proof
of work mining with proof of stake. The Eth2 Upgrades: Upgrading Ethereum to Radical New Heights, Ethereum Foundation, https://ethereum.org/en/eth2/.
We use the term credit for borrowing and lending relationships broadly, rather than in the technical sense of money creation. In contrast to CeFi bank loans,
where the borrowing process is separate from the pooling of capital to fund it, DeFi services can provide both sides simultaneously, often targeting the same users.