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Decentralized finance (DeFi) for financial institutions: a sentiment analysis and Islamic perspective

Muh Zul Hazmi Rapi,M. Hanif,Ghifary Duyufur Rohman,M. Siraj

Published 2025 in Journal of Islamic Marketing

ABSTRACT

This paper aims to review the perspectives and views of modern scholars on decentralized finance (DeFi) and assess the alignment of DeFi platforms and concepts with fundamental Islamic principles. The goal is to ensure that DeFi adapts to Islamic principles, maintaining the relevance of maqasid syariah within the evolving financial technology landscape. This research uses a qualitative methodology using sentiment analysis to evaluate 133 academic articles retrieved from the Scopus database. Sentiment extraction and analysis were performed using ATLAS.ti software to analyze the scholarly discourse on DeFi from an Islamic perspective. The findings of this study indicate that 59% of the studied texts exhibit positive sentiments toward DeFi, reflecting academic confidence in its potential advancements and benefits for the financial sector. Neutral sentiments constitute 25% of the responses, acknowledging both the opportunities and challenges DeFi poses. In contrast, 16% of the texts express negative views, emphasizing the need for a cautious approach to their broader implications. From an Islamic perspective, DeFi is generally permissible under the fiqh muamalah principle, provided it adheres to Sharia principles. This study suggests that implementing DeFi in financial institutions can enhance the equitable distribution of funds and resources, increase transparency and reduce transaction costs, thereby improving community welfare and economic inclusion. However, challenges in regulation and risk management necessitate cooperation among key players. This research is significant, as it offers a foundational understanding of DeFi’s potential within Islamic finance, guiding future innovations and regulatory frameworks in this emerging field. This study highlights the importance of aligning DeFi developments with Islamic principles to foster equitable and inclusive financial growth while addressing regulatory and risk management challenges. To the best of the authors’ knowledge, this research is the first study to conduct sentiment analysis of the scientific literature on DeFi from an Islamic perspective, providing a novel viewpoint on the intersection of DeFi and Islamic principles.

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