THE ROLE OF "MONEY LEGO" IN THE DEVELOPMENT OF DECENTRALIZED FINANCE

Abstract

The rapid development of the decentralized finance ecosystem between 2017 and 2020 was technologically driven by smart contracts built on the Ethereum blockchain and compatible networks. A fundamentally new architecture of financial services emerged, in which high modularity and protocol interoperability became the key determinants of success. One of the foundational principles underlying this success is the concept of "Money Lego" – the paradigm of a modular, composable financial construction system. Through the "Money Lego" principle, the philosophy of an open, modular, and programmable financial system is brought to life. Innovation within the crypto-finance ecosystem does not occur incrementally but rather follows an explosive trajectory, whereby increasingly complex and efficient constructs are assembled from simple, standardized building blocks – as the principle unlocks boundless possibilities for the creation of bespoke financial strategies.

The "Money Lego" architecture has fundamentally transformed the DeFi sector by enabling permissionless innovation, allowing developers to reuse existing financial primitives. However, composability also introduces systemic propagation risks: failures within a single protocol can cascade throughout the entire Lego structure, as has been demonstrated by major exploits and large-scale liquidation events. Accordingly, a thorough understanding of the role of "Money Lego" is essential for forecasting the developmental trajectory of DeFi and for formulating effective regulatory and infrastructural policy in the context of the ongoing transition to Web3-based finance.