The future of the internet is moving toward decentralization, with decentralized networks and blockchain technology playing essential roles in different sectors. Decentralized networks offer equality, accessibility, and security at a societal level, while blockchain technology guarantees security, authentication, and openness. Integrating blockchain technology with decentralized characteristics has become increasingly significant in finance; we call this “decentralized finance” (DeFi). As of January 2023, the DeFi crypto market capitalized USD 46.21 billion and served over 6.6 million users. As DeFi continues to outperform traditional finance (TradFi), it provides reduced fees, increased inclusivity, faster transactions, enhanced security, and improved accessibility, transparency, and programmability; it also eliminates intermediaries. For end users, DeFi presents asset custody options, peer-to-peer transactions, programmable control features, and innovative financial solutions. Despite its rapid growth in recent years, there is limited comprehensive research on mapping DeFi’s benefits and risks alongside its role as an enabling technology within the financial services sector. This research addresses these gaps by developing a DeFi classification system, organizing information, and clarifying connections among its various aspects. The research goal is to improve the understanding of DeFi in both academic and industrial circles to promote comprehension of DeFi taxonomy. This well-organized DeFi taxonomy aids experts, regulators, and decision-makers in making informed and strategic decisions, thereby fostering responsible integration into TradFi for effective risk management. This study enhances DeFi security by providing users with clear guidance on existing mechanisms and risks in DeFi, reducing susceptibility to misinformation, and promoting secure participation. Additionally, it offers an overview of DeFi’s role in shaping the future of the internet.

The integration of blockchain technology, particularly through Decentralized Finance (DeFi), has transformed the financial industry. As of January 2023, the DeFi crypto market had reached a market capitalization of $46.21 billion, serving a user base of 6,686,500. DeFi surpasses Traditional Finance (TradFi) in several aspects, including lower fees, inclusivity, faster processing, accessibility, transparency, programmability, security, and the absence of intermediaries. For end users, the advantages of DeFi lie in self-custody of their assets, peer-to-peer transactions, and the ability to harness programmability for complete control and creativity. However, despite the rapid growth of DeFi, there is a notable lack of comprehensive research on DeFi mapping, particularly in terms of its benefits, risks, financial services, and technology. This study aims to delineate the characteristics of DeFi mapping and address the research gap in DeFi knowledge.