In decentralized finance (DeFi), the role of central authority is fulfilled by the code that governs the operations and transactions on the blockchain. Referring to this code as “central” may be misleading since it implies that it is stored in a single, centralized location that could be targeted for takedown. However, the code is actually spread out across the blockchain, which is stored on a vast network of computers. This decentralized nature of DeFi makes it highly resilient and resistant to manipulation or control by any single entity.
In the realm of decentralized finance (DeFi), the primary authority does not stem solely from code, but rather from the decentralized networks and protocols that facilitate the operation of DeFi applications. DeFi is constructed on decentralized networks such as blockchain technology, which are not controlled by any single entity or central authority, but instead governed by the rules and protocols that are encoded within the network’s underlying code. While code is critical to DeFi, it is not the central authority; instead, it is the decentralized networks and protocols that establish the infrastructure and regulations governing the DeFi ecosystem and provide the basis upon which DeFi applications are established. In summary, the authority in DeFi is derived from the decentralized networks and protocols, which form the foundation of the DeFi ecosystem.