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Two of the most important technological advancements currently underway are the advent of quantum technologies, and the transitioning of global financial systems towards cryptographic assets, notably blockchain-based cryptocurrencies and…

Pricing of Securities · Quantitative Finance 2021-02-02 Peter P. Rohde , Vijay Mohan , Sinclair Davidson , Chris Berg , Darcy Allen , Gavin K. Brennen , Jason Potts

Automated market makers (AMMs) are a new type of trading venues which are revolutionising the way market participants interact. At present, the majority of AMMs are constant function market makers (CFMMs) where a deterministic trading…

Trading and Market Microstructure · Quantitative Finance 2024-07-25 Marcello Monga

Proof-of-work computation used in cryptocurrencies has witnessed significant growth in the U.S. and many other regions around the world. One of the most significant bottlenecks for the scalable deployment of such computation is its energy…

Systems and Control · Electrical Eng. & Systems 2023-03-14 Ali Menati , Yuting Cai , Rayan El Helou , Chao Tian , Le Xie

An automated market maker (AMM) is a state machine that manages pools of assets, allowing parties to buy and sell those assets according to a fixed mathematical formula. AMMs are typically implemented as smart contracts on blockchains, and…

Trading and Market Microstructure · Quantitative Finance 2024-01-29 Kenan Wood , Maurice Herlihy , Hammurabi Mendes , Jonad Pulaj

Using frequency distributions of daily closing price time series of several financial market indexes, we investigate whether the bias away from an equiprobable sequence distribution found in the data, predicted by algorithmic information…

Trading and Market Microstructure · Quantitative Finance 2010-08-17 Hector Zenil , Jean-Paul Delahaye

The asset trading volume on blockchain-based exchanges (DEX) increased substantially since the advent of Automated Market Makers (AMM). Yet, AMMs and their forks compete on the same blockchain, incurring unnecessary network and block-space…

Cryptography and Security · Computer Science 2021-06-21 Liyi Zhou , Kaihua Qin , Arthur Gervais

We propose the development of a prediction market for forecasting prices for "toxic assets" to be transferred from Irish banks to the National Asset Management Agency (NAMA). Such a market allows market participants to assume a stake in a…

General Finance · Quantitative Finance 2009-05-27 Alan Holland

Designing automated market makers (AMMs) for prediction markets on combinatorial securities over large outcome spaces poses significant computational challenges. Prior research has primarily focused on combinatorial prediction markets…

Computer Science and Game Theory · Computer Science 2024-11-15 Prommy Sultana Hossain , Xintong Wang , Fang-Yi Yu

Participation in permissionless blockchains results in competition over system resources, which needs to be controlled with fees. Ethereum's current fee mechanism is implemented via a first-price auction that results in unpredictable fees…

Computer Science and Game Theory · Computer Science 2021-06-08 Stefanos Leonardos , Barnabé Monnot , Daniël Reijsbergen , Stratis Skoulakis , Georgios Piliouras

Artificial Intelligence (AI) is one of the most transformative technologies of the 21st century. The extent and scope of future AI capabilities remain a key uncertainty, with widespread disagreement on timelines and potential impacts. As…

Artificial Intelligence · Computer Science 2023-11-27 Kyle A. Kilian , Christopher J. Ventura , Mark M. Bailey

Since Bitcoin first appeared on the scene in 2009, cryptocurrencies have become a worldwide phenomenon as important decentralized financial assets. Their decentralized nature, however, leads to notable volatility against traditional fiat…

Statistical Finance · Quantitative Finance 2024-10-23 Zeyd Boukhers , Azeddine Bouabdallah , Cong Yang , Jan Jürjens

We propose a modelling framework for the optimal selection of crypto assets. Crypto assets differ by two essential features: security (technological) and stability (governance). Investors make choices over crypto assets similarly to how…

Computers and Society · Computer Science 2019-07-23 Silvia Bartolucci , Andrei Kirilenko

We present an automated market-making (AMM) cross-settlement mechanism for digital assets on interoperable blockchains, focusing on central bank digital currencies (CBDCs) and stable coins. We develop an innovative approach for generating…

Trading and Market Microstructure · Quantitative Finance 2021-09-28 Alex Lipton , Artur Sepp

Prediction markets allow traders to bet on potential future outcomes. These markets exist for weather, political, sports, and economic forecasting. Within this work we consider a decentralized framework for prediction markets using…

Mathematical Finance · Quantitative Finance 2025-01-10 Hamed Amini , Maxim Bichuch , Zachary Feinstein

Most finance studies are discussed on the basis of several hypotheses, for example, investors rationally optimize their investment strategies. However, the hypotheses themselves are sometimes criticized. Market impacts, where trades of…

Computational Finance · Quantitative Finance 2022-02-03 Takanobu Mizuta , Isao Yagi , Kosei Takashima

The always-available liquidity of automated market makers (AMMs) has been one of the most important catalysts in early cryptocurrency adoption. However, it has become increasingly evident that AMMs in their current form are not viable…

Computer Science and Game Theory · Computer Science 2023-08-10 Conor McMenamin , Vanesa Daza , Bruno Mazorra

In this paper we propose a deep recurrent architecture for the probabilistic modelling of high-frequency market prices, important for the risk management of automated trading systems. Our proposed architecture incorporates probabilistic…

Statistical Finance · Quantitative Finance 2020-04-06 Ye-Sheen Lim , Denise Gorse

Blockchain technology has changed how people think about how they used to store and trade their assets, as it introduced us to a whole new way to transact: using digital currencies. One of the major innovations of blockchain technology is…

Computers and Society · Computer Science 2022-12-02 Trang Tran

Since its conception, the cryptocurrency market has been frequently described as an immature market, characterized by significant swings in volatility and occasionally described as lacking rhyme or reason. There has been great speculation…

Statistical Finance · Quantitative Finance 2023-06-14 Nick James , Max Menzies

Association rule mining aims to explore large transaction databases for association rules. Classical Association Rule Mining (ARM) model assumes that all items have the same significance without taking their weight into account. It also…

Databases · Computer Science 2010-04-22 P. Velvadivu , K. Duraisamy