Utilization of Decentralized Finance (DeFi) and Distributed Ledger Technology (DLT) in Banking operations

Distributed Ledger Technology (DLT) is a decentralized database system where transactions are recorded and verified across multiple nodes. Its key features include immutability, time-stamping, and consensus-based validation. Numerous DLT applications are in supply chain management, intellectual property, cross border payments, energy trading, real estate, and online donations. DeFi, a combination of cryptocurrency and blockchain technology, offers financial services without intermediaries. Hence transactions with various digital assets based on cryptocurrency price feeds needs an automated framework. Smart contracts, self-executing contracts with terms directly written into code, automate processes and reduce manual intervention. This paper proposes a decentralized financial trading model using the AAVE protocol. AAVE is a decentralized platform that allows for transactions with various digital assets based on cryptocurrency price feeds. Proposed model uses Chainlink, a decentralized oracle network, to provide accurate and reliable price feeds. IPFS is used for data storage, while Graph is employed for indexing and querying blockchain data. The paper presents an example of a DeFi protocol to simulate banking operations, showcasing the potential of DeFi and DLT in revolutionizing traditional banking processes.