Decentralized Finance (DeFi), a blockchain powered peer-to-peer financial
system, is mushrooming. One year ago the total value locked in DeFi systems was
approximately 700m USD, now, as of April 2021, it stands at around 51bn USD.
The frenetic evolution of the ecosystem makes it challenging for newcomers to
gain an understanding of its basic features. In this Systematization of
Knowledge (SoK), we delineate the DeFi ecosystem along its principal axes.
First, we provide an overview of the DeFi primitives. Second, we classify DeFi
protocols according to the type of operation they provide. We then go on to
consider in detail the technical and economic security of DeFi protocols,
drawing particular attention to the issues that emerge specifically in the DeFi
setting. Finally, we outline the open research challenges in the ecosystem.

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