THE RISE OF DECENTRALISED FINANCE: DISRUPTING TRADITIONAL BANKING SYSTEMS

One of the most radical changes in modern financial environment is Decentralised Finance (DeFi). Through the use of the blockchain technology, DeFi enables individuals to access financial services such as loan acquisition, lending, purchasing and selling assets without relying on third parties such as a bank. In the current research article, a thorough analytical review of the advancement of DeFi and its risk to the standard banking system is undertaken through its of literature review and the description of global data and the quantification of the market performance indicators. This paper comes up with the conclusion about the exponential growth of DeFi platforms, their risks, the emerging regulatory trends, and insights into future progress of long-term integrations based on the numbers of 2020 to 2025. The study also concludes that the DeFi is revolutionizing the financial sector by contributing to the development of transparency, efficiency, and financial inclusiveness but regulatory uncertainty, contract smartness and unintended liquidity are enormous setbacks.