  The decentralized and trustless nature of cryptocurrencies and blockchain
technology leads to a shift in the digital world. The possibility to execute
small programs, called smart contracts, on cryptocurrencies like Ethereum
opened doors to countless new applications. One particular exciting use case is
decentralized finance (DeFi), which aims to revolutionize traditional financial
services by founding them on a decentralized infrastructure. We show the
potential of DeFi by analyzing its advantages compared to traditional finance.
Additionally, we survey the state-of-the-art of DeFi products and categorize
existing services. Since DeFi is still in its infancy, there are countless
hurdles for mass adoption. We discuss the most prominent challenges and point
out possible solutions. Finally, we analyze the economics behind DeFi products.
By carefully analyzing the state-of-the-art and discussing current challenges,
we give a perspective on how the DeFi space might develop in the near future.
