Related papers: Stablecoins 2.0: Economic Foundations and Risk-bas…
Game theory is often used as a tool to analyze decentralized systems and their properties, in particular, blockchains. In this note, we take the opposite view. We argue that blockchains can and should be used to implement economic…
The recent financial crisis have generated renewed interests in fragilities of global financial networks among economists and regulatory authorities. In particular, a potential vulnerability of the financial networks is the "financial…
Non-Fungible Tokens (NFTs) are a new development in blockchain technology. News around NFTs is surrounded by skepticism because unrealistically high prices are being paid online for these NFTs which are in the form of apparently simple…
Blockchains is a special type of distributed systems that operates in unsafe networks. In most blockchains, all nodes should reach consensus on all state transitions with Byzantine fault tolerant algorithms, which creates bottlenecks in…
Digital payment schemes show an ever increasing importance. Out of the countless different schemes available this article focuses on the popular Bitcoin system. The authors provide a description of Bitcoin's unique technological basis and…
Asset custody is a core financial service in which the custodian holds in-safekeeping assets on behalf of the client. Although traditional custody service is typically endorsed by centralized authorities, decentralized custody scheme has…
The rising importance of cryptocurrencies as financial assets pushed their applicability from an object of speculation closer to standard financial instruments such as loans. In this work, we initiate the study of secure protocols that…
In the past decade, blockchain has shown a promising vision greatly to build the trust without any powerful third party in a secure, decentralized and salable manner. However, due to the wide application and future development from…
Systemic risk is a rapidly developing area of research. Classical financial models often do not adequately reflect the phenomena of bubbles, crises, and transitions between them during credit cycles. To study very improbable events,…
This paper introduces JANUS, a Stablecoin 3.0 protocol designed to address the stablecoin trilemma--simultaneously improving decentralization (D), capital efficiency (E), and safety-stability (S). Building upon insights from previous…
To non-experts, the traditional Centralized Finance (CeFi) ecosystem may seem obscure, because users are typically not aware of the underlying rules or agreements of financial assets and products. Decentralized Finance (DeFi), however, is…
Cryptocurrencies are considered relevant assets and they are currently used as an investment or to carry out transactions. However, specific characteristics commonly associated with the cryptocurrencies such as irreversibility,…
A lot of business and research effort currently deals with the so called decentralised ledger technology blockchain. Putting it to use carries the tempting promise to make the intermediaries of social interactions superfluous and…
Cryptocurrencies are a type of digital money meant to provide security and anonymity while using cryptography techniques. Although cryptocurrencies represent a breakthrough and provide some important benefits, their usage poses some risks…
We define and examine the shutdown problem for blockchain systems: how to gracefully end the system's operation at the end of its useful life. A particular focus is those blockchain systems that hold archival data of long-lived interest. We…
This paper examines the effects of inherent risks in the emerging technology of non-fungible tokens and proposes an actionable set of solutions for stakeholders in this ecosystem and observers. Web3 and NFTs are a fast-growing 300 billion…
Despite being described as a medium of exchange, cryptocurrencies do not have the typical attributes of a medium of exchange. Consequently, cryptocurrencies are more appropriately described as crypto assets. A common investment attribute…
Blockchain technology has become almost as famous for incidents involving security breaches as for its innovative potential. We shed light on the prevalence and nature of these incidents through a database structured using the STIX format.…
"What are the origins of risks?" and "How material are they?" -- these are the two most fundamental questions of any risk analysis. Quantitative Structuring -- a technology for building financial products -- provides economically meaningful…
This paper develops a dynamic monetary model to study the (in)stability of the fractional reserve banking system. The model shows that the fractional reserve banking system can endanger stability in that equilibrium is more prone to exhibit…