The St.Louis Federal Reserve Bank recently shared a detailed overview of decentralized finance written by Professor Fabian Schär of the University of Basel.

Amidst a crypto bull cycle with retail investors throwing their money into tokens like DOGE, it’s quite refreshing to see an article with such a deep level of inner workings of DeFi come out of a regulated body like the St.Louis Federal Reserve Bank.

Professor Fabian Schär teaches distributed ledger technologies and is the managing director of the Center for Innovative Finance at the Faculty of Business and Economics at the University of Basel. In this comprehensive overview, he explains the multi-layer nature of DeFi with Ethereum serving as the base settlement layer in all examples he gives in the article.

In this article, he covers popular DeFi building blocks that enable exchange, lending, derivatives, and asset management. Mainstay projects like  MakerDao, Uniswap, and Aave are directly referenced multiple times.

This news spread like wildfire today further fueling the positive sentiment kick-started by the confirmation of Telsa Motors adding approximately $1.5B of Bitcoin to its corporate balance sheets earlier in the day. The article ends also on a very positive note, with the Professor noting the major shifts that DeFi may cause.

DeFi may lead to a paradigm shift in the financial industry and potentially contribute toward a more robust, open, and transparent financial infrastructure.

Some may remember that the St.Louis Fed as also one of the first regulated institutions to take Bitcoin seriously and give it through evaluation when they published this article on how Bitcoin can serve as a usable currency.

For updates on more articles like this, follow the St.Louis Fed on Twitter.