Exploring the Boundaries of Decentralization:The Interplay Between Decentralized and Traditional Finance under Contemporary Capitalism

With the introduction of Bitcoin in 2009, a new financial paradigm was created. Decentralized Finance has been conceptualized as an autonomous and parallel financial system, distinct from traditional financial institutions and capitalist relationships. However, the necessary infrastructure, services, and assets that enable Decentralized Finance’s deployment need to be developed and, thus, funded. By analyzing the top-five investors of a dataset of companies from the cryptocurrency and blockchain industry, I show that funding companies belong to the sphere of traditional finance, they are co-occurring in their funded projects, and there are some firms that play a central role as investors. This implies that, contrary to the philosophical liberalist discourses that justify cryptocurrencies’ adoption, Decentralized Finance should be rendered as a subsystem of valorization within the global financial system.