Qualifying decentralized finance as a financial asset: A multiple frequency analysis

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Abstract

We examine the qualifying attributes of decentralized finance (DeFi) as a financial asset class. To achieve this objective, we perform analysis on the relationship (using both level and percentage-change data) between DeFi valuation and selected influencing variables, namely total value locked (TVL), Bitcoin (BTC) value, and market variables. A suite of long-panel data econometric methods is employed on a multi-frequency (daily, weekly, and monthly) panel dataset comprising 16 major DeFi protocols from January 2022 to December 2023. Our empirical design aims to be a comprehensive assessment and triangulation. There are several key findings. First, while there is evidence of cointegration suggesting a possible long-run relationship, this relationship is found to be inconsistent across different variables and time frequencies. However, the impulse response analysis suggests that shocks from the influencing variables do not have a permanent impact. Second, Bitcoin value is found to be the most important influencing factor (positive and highly significant), reflecting strong cryptocurrency market sentiment and aligning with previous research on spillover effects from major cryptocurrencies (Șoiman et al., 2022; Yousaf et al., 2022).

Keywords: Decentralized Finance, Financial Assets, Total Value Locked, Bitcoin, Market Variables, Panel Data Econometrics

Authors’ individual contribution: Conceptualization — M.R.M.; Methodology — M.D.A.; Data Curation — M.R.M.; Writing — Original Draft — M.R.M.; Writing — Review & Editing — M.D.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C33, E44, G12, G23, O33

Received: 14.06.2025
Revised: 24.08.2025; 06.11.2025
Accepted: 18.11.2025
Published online: 24.11.2025

How to cite this paper: Mahardhika, M. R., & Ariefianto, M. D. (2025). Qualifying decentralized finance as a financial asset: A multiple frequency analysis. Risk Governance and Control: Financial Markets & Institutions, 15(4), 122–133. https://doi.org/10.22495/rgcv15i4p11