Exploring blockchain-based open finance: The role of advanced cryptographic tools, state-of-the-art achievements, and background challenges

The rapid advancement of financial technologies has catalyzed the evolution of Blockchain-Based Open Finance (BB-OpenFi), an emerging paradigm that integrates the decentralized, trustless nature of Decentralized Finance (DeFi) with the regulatory compliance and structured oversight of Open Finance (OpenFi). This paper explores how advanced cryptographic techniques, including Zero-Knowledge Proofs (ZKPs), Secure Multi-Party Computation (MPC), and Homomorphic Encryption (HE), address critical challenges in security, privacy, scalability, and regulatory compliance in the BB-OpenFi framework. We propose a comprehensive cryptographic framework that ensures confidentiality, integrity, and verifiability in financial transactions, overcoming limitations such as key escrow vulnerabilities, consensus-driven parameter determination, and secret parameter protection. By providing formal cryptographic models, implementation guidelines, and comparative analyses, our findings demonstrate that the BB-OpenFi framework is a highly scalable and secure next-generation financial paradigm. This research not only bridges the gap between traditional finance, OpenFi, and DeFi, but also sets a new standard for trust and efficiency in global financial systems, making it a valuable reference for academia, industry, and regulatory bodies.

Peer-to-Peer Networking and Applications

Peer-to-Peer Networking and Applications

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1936-6450

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