Related papers: Optimal Algorithmic Monetary Policy
Traditional blockchain design gives miners or validators full control over transaction ordering, i.e., they can freely choose which transactions to include or exclude, as well as in which order. While not an issue initially, the emergence…
Our goal is to compute a policy that guarantees improved return over a baseline policy even when the available MDP model is inaccurate. The inaccurate model may be constructed, for example, by system identification techniques when the true…
Tokenised money encompasses a broad range of digital monetary instruments issued on distributed ledger technology, including Central Bank Digital Currencys (CBDCs), deposit tokens, stablecoins, and decentralised protocol-based designs.…
Blockchain is a decentralized transaction and data management solution, the technological weapon-of-choice behind the success of Bitcoin and other cryptocurrencies. As the number and variety of existing blockchain implementations continues…
A major drawback in deploying central bank digital currencies (CDBC) is the offline puzzle, which requires that a CBDC must keep the provision given by cash, and, simultaneously, avoid double-spending, counterfeiting, and other issues. The…
This paper examines the economic and security implications of Proof-of-Stake (POS) designs, providing a survey of POS design choices and their underlying economic principles in prominent POS-blockchains. The paper argues that…
Stablecoins - crypto tokens whose value is pegged to a real-world asset such as the US Dollar - are an important component of the DeFi ecosystem as they mitigate the impact of token price volatility. In crypto-backed stablecoins, the peg is…
Algorithmic stability is a central concept in statistics and learning theory that measures how sensitive an algorithm's output is to small changes in the training data. Stability plays a crucial role in understanding generalization,…
We investigate the market microstructure of Automated Market Makers (AMMs), the most prominent type of blockchain-based decentralized exchanges. We show that the order execution mechanism yields token value loss for liquidity providers if…
As distributed ledgers, blockchains run consensus protocols which trade capacity for consistency, especially in non-ideal networks with incomplete connectivity and erroneous links. Existing studies on the tradeoff between capacity and…
A decade long thrive of cryptocurrency has shown its potential as a source of alternative-finance and the security and the robustness of the underpinning blockchain technology. However, most cryptocurrencies fail to show inimitability and…
The democratization of artificial intelligence through decentralized networks represents a paradigm shift in computational provisioning, yet the long-term viability of these ecosystems is critically endangered by the extreme volatility of…
Thanks to the high potential for profit, trading has become increasingly attractive to investors as the cryptocurrency and stock markets rapidly expand. However, because financial markets are intricate and dynamic, accurately predicting…
In recent years, cryptocurrencies have attracted growing attention from both private investors and institutions. Among them, Bitcoin stands out for its impressive volatility and widespread influence. This paper explores the predictability…
In this review, we evaluate the mechanisms behind the decentralized finance protocols for generating stable, passive income. Currently, such savings interest rates can be as high as 20% annually, payable in traditional currency values such…
Crowdfunding platforms face high transaction fees, need for more transparency, and trust deficits. These issues deter contributors and entrepreneurs from effectively leveraging crowdfunding for innovation and growth. Blockchain technology…
In this paper, we construct a decentralized clearing mechanism which endogenously and automatically provides a claims resolution procedure. This mechanism can be used to clear a network of obligations through blockchain. In particular, we…
Central Bank Digital Currencies (CBDCs) are proposed as a public response to the uptake of privately run digital payments, with the digital euro, under development by the European Central Bank (ECB), serving as a prominent example. This…
Blockchain transactions consume diverse resources, foremost among them storage, but also computation, communication, and others. Efficiently charging for these resources is crucial for effective system resource allocation and long-term…
The global financial system stands at an inflection point. Stablecoins represent the most significant evolution in banking since the abandonment of the gold standard, positioned to enable "Banking 2.0" by seamlessly integrating…