Runaway Train? Decentralised Finance and the Myth of the Private Platform Economy

42 Pages Posted: 22 Jan 2024

See all articles by Peer C. Zumbansen

Peer C. Zumbansen

McGill University, Faculty of Law; King's College London - The Dickson Poon School of Law

Date Written: December 20, 2023


In the span of one decade and a half, since the anonymous Nakamoto invented the Bitcoin blockchain, the decentralisation of finance [“DeFi”] has both been heralded as a normatively desirable next phase in the constitutionalisation of money and acknowledged as simply a fact of life. Another interpretation highlights the actual asymmetry between those who can benefit from the evolving technology and those who find themselves descending further into cycles of debt and self-exploitation. The first set of opinions is based on the assumption that a non-hierarchical, access-controlled system of financial transaction, housed in technology rather than in institutions, will lead to universal inclusivity and transparency. The skeptical view focuses on the regulatory challenges that arise from the moving away from a financial system which is based on the idea of a public good and the reliance on regulatory supervision and enforcement but which thus far has not been able to design a comparable protective infrastructure for the most vulnerable users of the financial system. This article sets out to sketch a roadmap through the baffling transnational landscape of DeFi while interrogating the normative claims that are made in defense of contrasting DeFi infrastructures from ‘traditional’ banking and securities systems. Contextualising DeFi’s democratisation promise within broader contemporary contestations of democratic practices and the role of law in them, the paper critically interrogates DeFi’s ability to provide a framework not only for individual financial inclusion but for collective pursuit of transformative, democratic governance of economic and financial transactions.

Keywords: Decentralized Finance, Financialization, Algorithmic Governance, Blockchain, Platform economy, code, distributed ledger, smart contracts, banking

Suggested Citation

Zumbansen, Peer C., Runaway Train? Decentralised Finance and the Myth of the Private Platform Economy (December 20, 2023). McGill SGI Research Papers in Business, Finance, Law and Society Research Paper No. 2024-01, Available at SSRN: or

Peer C. Zumbansen (Contact Author)

McGill University, Faculty of Law ( email )

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King's College London - The Dickson Poon School of Law ( email )

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London, WC2R 2LS
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