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In recent years, blockchain technology has introduced decentralized finance (DeFi) as an alternative to traditional financial systems. DeFi aims to create a transparent and efficient financial ecosystem using smart contracts and emerging…

Computational Engineering, Finance, and Science · Computer Science 2024-03-14 Bingqiao Luo , Zhen Zhang , Qian Wang , Anli Ke , Shengliang Lu , Bingsheng He

Decentralized Autonomous Organizations (DAOs) have emerged as a novel governance mechanism in blockchain ecosystems, particularly within Decentralized Finance (DeFi). By enabling token holders to propose and vote on protocol changes, these…

Cryptography and Security · Computer Science 2025-07-22 Johnnatan Messias , Vabuk Pahari , Balakrishnan Chandrasekaran , Krishna P. Gummadi , Patrick Loiseau

Decentralized Finance (DeFi), a financial ecosystem without centralized controlling organization, has introduced a new paradigm for lending and borrowing. However, its capital efficiency remains constrained by the inability to effectively…

Risk Management · Quantitative Finance 2025-03-26 Rik Ghosh , Arka Datta , Vidhi Aggarwal , Sudipan Sinha , Rajdeep Sengupta

The paper examines decentralized cryptocurrency protocols that are based on the use of internal tokens as identity tools. An analysis of security problems with popular Proof-of-stake consensus protocols is provided. A new protocol,…

Cryptography and Security · Computer Science 2016-01-12 Alexander Chepurnoy

User transactions on Ethereum's peer-to-peer network are at risk of being attacked. The smart contracts building decentralized finance (DeFi) have introduced a new transaction ordering dependency to the Ethereum blockchain. As a result,…

Cryptography and Security · Computer Science 2022-09-23 Lioba Heimbach , Roger Wattenhofer

Blockchain technology relies on decentralization to resist faults and attacks while operating without trusted intermediaries. Although industry experts have touted decentralization as central to their promise and disruptive potential, it is…

Cryptography and Security · Computer Science 2025-06-04 Harang Ju , Ehsan Valavi , Madhav Kumar , Sinan Aral

Financial options are fundamental to traditional markets, enabling strategies ranging from hedging to speculating. Yet, while the Automated Market Maker paradigm has revolutionized decentralized spot markets, no equivalent standard has…

Mathematical Finance · Quantitative Finance 2026-05-20 Maxim Bichuch , Zachary Feinstein

Much of the recent excitement around decentralized finance (DeFi) comes from hopes that DeFi can be a secure, private, less centralized alternative to traditional finance systems. However, people moving to DeFi sites in hopes of improving…

Cryptography and Security · Computer Science 2023-02-07 Philipp Winter , Anna Harbluk Lorimer , Peter Snyder , Benjamin Livshits

The rise of Decentralized Finance ("DeFi") on the Ethereum blockchain has enabled the creation of lending platforms, which serve as marketplaces to lend and borrow digital currencies. We first categorize the activity of lending platforms…

Trading and Market Microstructure · Quantitative Finance 2022-06-08 Michael Darlin , Georgios Palaiokrassas , Leandros Tassiulas

The trustless nature of permissionless blockchains renders overcollateralization a key safety component relied upon by decentralized finance (DeFi) protocols. Nonetheless, factors such as price volatility may undermine this mechanism. In…

General Finance · Quantitative Finance 2021-12-14 Daniel Perez , Sam M. Werner , Jiahua Xu , Benjamin Livshits

Decentralized financial (DeFi) applications on the Ethereum blockchain are highly interoperable because they share a single state in a deterministic computational environment. Stakeholders can deposit claims on assets, referred to as…

Computers and Society · Computer Science 2021-11-30 Victor von Wachter , Johannes Rude Jensen , Omri Ross

Currently, the advantages of decentralization through blockchain technology in the financial sector are actively discussed. In this article, we investigate the decentralization in the governance of Decentralized Autonomous Organizations…

General Finance · Quantitative Finance 2023-11-07 Kirill Kolmykov

Blockchain introduces decentralized trust in peer-to-peer networks, advancing security and democratizing systems. Yet, a unified definition for decentralization remains elusive. Our Systematization of Knowledge (SoK) seeks to bridge this…

General Economics · Economics 2023-08-21 Luyao Zhang , Xinshi Ma , Yulin Liu

There are a multitude of Blockchain-based physical infrastructure systems, operating on a crypto-currency enabled token economy, where infrastructure suppliers are rewarded with tokens for enabling, validating, managing and/or securing the…

Distributed, Parallel, and Cluster Computing · Computer Science 2022-11-09 Oguzhan Akcin , Robert P. Streit , Benjamin Oommen , Sriram Vishwanath , Sandeep Chinchali

This paper presents a comprehensive statistical analysis of the Web3 ecosystem, comparing various Web3 tokens with traditional financial assets across multiple time scales. We examine probability distributions, tail behaviors, and other key…

Statistical Finance · Quantitative Finance 2024-12-09 Wei-Ru Chen , A. Christian Silva , Shen-Ning Tung

We explore the adoption of graph representation learning (GRL) algorithms to investigate similarities across services offered by Decentralized Finance (DeFi) protocols. Following existing literature, we use Ethereum transaction data to…

Statistical Finance · Quantitative Finance 2024-04-25 Junliang Luo , Stefan Kitzler , Pietro Saggese

We develop a model of coordination and allocation of decentralized multi-sided markets, in which our theoretical analysis is promisingly optimizing the decentralized transaction packaging process at high-throughput blockchains or Web 3.0…

General Economics · Economics 2023-01-27 Yuxuan Lu , Qian Qi , Xi Chen

This paper presents a theoretical extension of the DeTEcT framework proposed by Sadykhov et al., DeTEcT, where a formal analysis framework was introduced for modelling wealth distribution in token economies. DeTEcT is a framework for…

General Finance · Quantitative Finance 2025-01-17 Rem Sadykhov , Geoffrey Goodell , Philip Treleaven

Fair division is typically framed from a centralized perspective. However, in practice resource allocation often occurs via decentralized networks. We study a decentralized variant of fair division inspired by altruistic dynamics observed…

Computer Science and Game Theory · Computer Science 2026-03-02 Joel Miller , Rishi Advani , Ian Kash , Chris Kanich , Lenore Zuck

Decentralization has been touted as the principal security advantage which propelled blockchain systems at the forefront of developments in the financial technology space. Its exact semantics nevertheless remain highly contested and…

Cryptography and Security · Computer Science 2024-04-16 Christina Ovezik , Dimitris Karakostas , Aggelos Kiayias