Navigating the Landscape: A Taxonomy Approach to Blockchain-based Derivative Protocols

Abstract

Blockchain-based derivative protocols have the potential to revolutionize the current risk management landscape. However, despite their increasing adoption, a comprehensive understanding of the dimensions and characteristics of these protocols is still lacking in the literature. To address this research gap, we present an analysis of currently available blockchain-based derivative protocols, focusing specifically on their applicability in corporate commodity risk management. Drawing upon interviews with five professionals from diverse corporations, we identify the requirements of corporate financial asset and commodity risk managers as the basis for our taxonomy development. Leveraging a data set derived from the analysis of 10 distinct blockchain-based derivative protocols through two successive research loops, we provide a structure that enhances our understanding of these protocols. Our taxonomy unveils 5 meta-characteristics, encompassing 21 dimensions and 64 characteristics, offering insights into the nature of blockchain-based derivative protocols.