MARKET INFRASTRUCTURE

Decentralized Finance (DeFi)

Financial applications—lending, borrowing, trading, and yield—built on public blockchains and governed by smart contracts, operating without traditional intermediaries. Institutional DeFi adapts these protocols with identity and compliance layers.

EXAMPLE

Ondo Finance channels tokenized Treasury yield into DeFi-native stablecoin protocols, creating a bridge between regulated instruments and permissionless liquidity.

Relevant Roles and Functions

On-chain Role
Chief Digital Market Infrastructure Officer
Head of On-Chain Markets
Function
Digital Asset Custody Integration
Interoperability between Financial Networks
On-chain Settlement Systems
Tokenized Market Infrastructure

Related Terms

Smart Contract

Self-executing code deployed on a blockchain that automatically enforces and carries out the terms of an agreement when predefined conditions are met—without requiring an intermediary to oversee performance.

Example

A smart contract can automatically release collateral when a loan is repaid, eliminating manual processing and reducing operational risk.

Liquidity Pool

A smart contract that holds reserves of two or more assets, enabling decentralized trading, lending, or borrowing. Participants who deposit assets earn a share of fees proportional to their contribution.

Example

An institutional liquidity pool for tokenized government bonds enables real-time repo without requiring a central dealer to intermediate each trade.

Permissionless Blockchain

An open blockchain network—such as Ethereum or Solana—where any participant can transact or validate without approval. These networks underpin most DeFi activity and public tokenization platforms.

Example

BlackRock chose to launch its BUIDL tokenized fund on the permissionless Ethereum network to maximize accessibility and composability with DeFi protocols.

Real-World Asset

A traditional financial or physical asset—such as a government bond, real estate, private credit facility, or trade receivable—that has been tokenized and represented on a blockchain for on-chain trading, settlement, or collateral use.

Example

BlackRock's BUIDL fund tokenizes U.S. Treasury exposure, allowing institutions to use the token as real-time on-chain collateral instead of wiring cash.