Related papers: Blockchain scaling and liquidity concentration on …
One of the exciting recent developments in decentralized finance (DeFi) has been the development of decentralized cryptocurrency exchanges that can autonomously handle conversion between different cryptocurrencies. Decentralized exchange…
Financial markets have evolved over centuries, and exchanges have converged to rely on the order book mechanism for market making. Latency on the blockchain, however, has prevented decentralized exchanges (DEXes) from utilizing the order…
The standard approach for compensating liquidity providers on many decentralized exchanges (DEX) for serving as counter-party to swaps is through charging a small percentage of fees. The expected payoff from the cash flow of this mode of…
The gas fee, paid for inclusion in the blockchain, is analyzed in two parts. First, we consider how effort in terms of resources required to process and store a transaction turns into a gas limit, which, through a fee, comprised of the base…
Liquid staking and restaking represent recent innovations in Decentralized Finance (DeFi) that garnered user interest and capital. Liquid Staking Tokens (LSTs), tokenized representations of staked tokens on Proof-of-Stake (PoS) blockchains,…
Public blockchains have spurred the growing popularity of decentralized transactions and smart contracts, but they exhibit limitations on the transaction throughput, storage, and computation. To avoid transaction gridlock, public…
Rollups have become the de facto scalability solution for Ethereum, securing more than $55B in assets. They achieve scale by executing transactions on a Layer 2 ledger, while periodically posting data and finalizing state on the Layer 1,…
Increasing the transactional throughput of decentralized blockchains in a secure manner has been the holy grail of blockchain research for most of the past decade. This paper introduces a scheme for scaling blockchains while retaining…
Exchanges acquire excess processing capacity to accommodate trading activity surges associated with zero-sum high-frequency trader (HFT) "duels." The idle capacity's opportunity cost is an externality of low-latency trading. We build a…
Stable coins are not very stable. Cash collateralized coins are more stable, but the overall failure rate is similar to tokens that are not designed to be stable. USD Coin, Tether and Dai have the largest Ethereum market shares, and they…
Decentralization, which has backed the hyper growth of many blockchains, comes at the cost of scalability. To understand this fundamental limitation, this paper proposes a quantitative measure of blockchain decentralization, and discusses…
Blockchain technology, while revolutionary in enabling decentralized transactions, faces scalability challenges as the ledger must be replicated across all nodes of the chain, limiting throughput and efficiency. Sharding, which divides the…
This paper develops a model to evaluate the viability of blockchain markets as the sole venue for price formation. Blockchains clear at discrete intervals called block time, and transactions are executed sequentially according to priority…
Ethereum's Gas mechanism attempts to set transaction fees in accordance with the computational cost of transaction execution: a cost borne by default by every node on the network to ensure correct smart contract execution. Gas encourages…
While many researchers adopt a sharding approach to design scaling blockchains, few works have studied the transaction placement problem incurred by sharding protocols. The widely-used hashing placement algorithm renders an overwhelming…
As the number of decentralized applications and users on Ethereum grows, the ability of the blockchain to efficiently handle a growing number of transactions becomes increasingly strained. Ethereums current execution model relies heavily on…
Decentralized Finance (DeFi) is a rapidly evolving segment of blockchain technology that enables a transformative approach to financial services through Web3 applications. By leveraging smart contracts, DeFi allows developers to build…
Blockchains have shown great promise as peer-to-peer digital currency systems over the past 10 years. However, with increased popularity, the demand for processing transactions has also grown leading to increased costs, confirmation times,…
In this paper, we present a pricing mechanism that aligns incentives of agents who exchange resources on a decentralized ledger with the goal of maximizing transaction throughput. Subdividing a blockchain ledger into shards promises to…
This paper investigates how pricing schemes can achieve efficient allocations in blockchain systems featuring multiple transaction queues under a global capacity constraint. I model a capacity-constrained blockchain where users submit…