# A Review on Decentralized Finance Ecosystems
## 4 The Taxonomy
### Low Cost
#### 4.3.2 Features  
DeFi platforms and applications encompass diverse technical elements, protocols, and functionalities that empower users to participate in decentralized financial activities. DeFi exhibits a range of characteristics that facilitate user engagement. Here are a few examples of features commonly observed in DeFi. Transparent Transaction  
DeFi stands out for its transparency, encompassing software components, data, and processes involved [31]. It aims to eliminate private agreements, back-room deals, and centralization, allowing users to scrutinize the precise rules governing financial assets and products [73]. Most DeFi projects have transparent transactions, allowing users to verify and audit all activities [11]. In the DeFi context, financial information is typically publicly available, benefiting researchers and users. This transparency provides historical and current data, significantly improving compared to TradFi systems, where information is often scattered across proprietary databases or unavailable. DeFi's transparency facilitates identifying and preventing unwanted events and a quicker understanding of their origins and potential consequences [42]. DeFi enables users to investigate and understand the regulatory framework of financial assets and products by eliminating the need for private agreements, centralized control, and confidential operations. Transparent monitoring of all transactions fosters increased trust within the DeFi industry [11; 31; 42; 73]. Programmability  
Programmability refers to the smart contracts' capacity to automate financial activities and create novel financial instruments and digital assets. These contracts are easily executable on a blockchain platform, interacting with business logic to function automatically without human intervention. DeFi platforms leverage this potential, emphasizing the security of their automated processes, which operate strictly as programmed and are immune to manipulation, distinguishing them as more secure than TradFi systems [11; 31]. Programmability enables the modification, embedding, or reduction of predefined code instructions. Smart contracts within DeFi platforms automate operations by adjusting programs based on programmatic business logic. They drive the creation of innovative financial instruments and digital assets while allowing for easy modification and creation of new programs [99]. This emphasis on security stems from the system's adherence to programmed rules, ensuring its immunity to manipulation, a marked contrast from TradFi systems [25]. Tokenization  
The digital assets concept is relatively unexplored in TradFi, but in the DeFi ecosystem, it provides a standardized framework for asset tokenization [9]. Tokenization can create a new asset class for investors, enhancing accessibility, streamlining operations, reducing costs, and accelerating processes in the financial industry [100]. The Ethereum Request for Comments-20 (ERC-20) standard has emerged as the widely adopted choice for asset tokenization in DeFi, offering comprehensive asset coverage. Governance  
In the realm of TradFi, centralized governance prevails, with decision-making authority concentrated in the hands of a few central entities or organizations. In contrast, DeFi embraces decentralized governance, which involves a broader and more distributed network of participants in decision-making processes. Governance in DeFi encompasses the establishment of rules, processes, and mechanisms that govern the operation and management of various aspects within the DeFi ecosystem, including protocol updates, fund allocations, and rule changes. Key stakeholders, represented by token holders, play a significant role in shaping the governance of DeFi protocols, thereby enhancing efficiency, transparency, and inclusivity [101]. Blockchain-based governance in DeFi strikes a balance between accountability and decentralization, leveraging both on-chain and off-chain structures to facilitate decision-making [102].