Emerging Institutional Logics in Decentralized Finance: A Multi-stakeholder Analysis

Abstract

The financial sector is faced with a paradigm shift in the form of Decentralized Finance (DeFi), offering enhanced accessibility, autonomy, and efficiency. This thesis analyses the emerging institutional logics within the DeFi ecosystem, to understand the dynamics that underpin it. The thesis utilizes a grounded theory approach in combination with the Gioia methodology to analyse data sources from various stakeholder groups involved in the DeFi ecosystem. This results in a robust analytical framework that identifies five key dimensions: Technical Foundations and Innovations, Challenges and Risks, Evolving Regulatory Dynamics, Transformative Impact on Traditional Finance, and Socioeconomic Impact and Market Dynamics. In addition, this thesis theorizes the “DeFi Dynamics Model” based on the identified dimensions, and highlights two logics within the DeFi space, competing for dominance. Finally, the theoretical and practical implications of these findings are discussed, which provide valuable insights for academics, policymakers, and industry stakeholders. As DeFi continues to evolve, this thesis provides a fundamental exploration of its institutional underpinnings and thus a roadmap for future research and practical engagement.