The impact of decentralized finance (DEFI) on traditional banking systems: Opportunities and challenges

DeFi, as a most revolutionary movement in the finance sector, offers an open, permission less, and translucent financial ecosystem working on blockchain technology. The present study thus explores the impact that DeFi creates on the traditional banking systems while laying down the opportunities and challenges it carries with it. The study will set to outline a deep understanding of how DeFi affects traditional financial systems especially the critical topics including transparency, cost-effectiveness, and accessibility. It also explores the regulatory obstacles and the hazards associated with an expanded DeFi. It also explores the regulatory obstacles and associated hazards that come with DeFi's expansion. The research's conclusions are meant to educate financial institutions, legislators, and software developers on the direction of finance and possible ways to incorporate DeFi into established financial systems.