Retail Investors in DeFi-Based Stock Markets: Fairness, Transparency, and Manipulation Risks
DOI:
https://doi.org/10.48165/tjmitm.2026.16.01.09Abstract
DeFi-based stock markets extend decentralized finance infrastructures to tokenized and synthetic equity exposures, raising fresh questions about fairness, transparency, and protection for small investors in emerging markets. This study investigates how Indian retail investors perceive governance features of DeFi platforms offering India- linked tokenized stocks and how these perceptions relate to trust and intention to continue investing. Using a quantitative, cross sectional online survey of 250 retail investors with DeFi experience, the research measures perceived fairness, transparency, manipulation risk, trust and participation intention through multi-item Likert scales and analyses relationships using descriptive statistics, correlations and multiple regression. Findings indicate moderate levels of perceived fairness, transparency and trust, alongside non-trivial concerns about manipulation risk. However, perceived fairness and transparency show only weak, statistically insignificant effects on trust, manipulation risk has a marginal negative association, and trust does not significantly predict intention to continue investing. These results suggest that other drivers such as returns, liquidity, user experience and regulatory developments may dominate governance perceptions in shaping behaviour. Limitations include non-probability sampling, self-reported measures, and a single country, cross-sectional design within a rapidly evolving DeFi environment. This study offers tentative empirical evidence about retail involvement in equity markets that are built on DeFi, and outlines governance, regulatory, and investor education mechanisms to enhance enforcement of market integrity and investor protection.
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