Related papers: Assessing Stablecoin Credit Risks
We develop a model of stable assets, including non-custodial stablecoins backed by cryptocurrencies. Such stablecoins are popular methods for bootstrapping price stability within public blockchain settings. We derive fundamental results…
Blockchain technologies are one possible avenue for increasing the resilience of the Smart Grid, by decentralizing the monitoring and control of system-level objectives such as voltage stability protection. They furthermore offer benefits…
U.S. dollar stablecoins are increasingly used as payment and settlement instruments beyond cryptocurrency markets. With the enactment of the GENIUS Act in 2025, the United States established the first comprehensive federal framework…
We set up a structural model to study credit risk for a portfolio containing several or many credit contracts. The model is based on a jump--diffusion process for the risk factors, i.e. for the company assets. We also include correlations…
Lending protocols are one of the main applications of Decentralized Finance (DeFi), enabling crypto-assets loan markets with a total value estimated in the tens of billions of dollars. Unlike traditional lending systems, these protocols…
In May 2022, an apparent speculative attack, followed by market panic, led to the precipitous downfall of UST, one of the most popular stablecoins at that time. However, UST is not the only stablecoin to have been depegged in the past.…
Cryptocurrency refers to a type of digital asset that uses distributed ledger, or blockchain, technology to enable a secure transaction. Although the technology is widely misunderstood, many central banks are considering launching their own…
Blockchain design involves many tradeoffs, and much debate has focused on tradeoffs related to scaling parameters such as blocksize. To address some of the confusion around this subject, we present a probability proof of the DCS Triangle.…
Stablecoins are digital assets designed to maintain a stable value, typically pegged to traditional currencies. Despite their growing prominence, many stablecoins have struggled to consistently meet stability expectations, and their…
Since its inception, the blockchain technology has shown promising application prospects. From the initial cryptocurrency to the current smart contract, blockchain has been applied to many fields. Although there are some studies on the…
The instability of the financial system as experienced in recent years and in previous periods is often linked to credit defaults, i.e., to the failure of obligors to make promised payments. Given the large number of credit contracts, this…
Cryptocurrency is a novel exploration of a form of currency that proposes a decentralized electronic payment scheme based on blockchain technology and cryptographic theory. While cryptocurrency has the security characteristics of being…
Stablecoins have emerged as a rapidly growing digital payment instrument, raising the question of whether blockchain-based settlement can function as a substitute for incumbent card networks in retail payments. This Systematization of…
Decentralization is a fundamental design element of the Web3 economy. Blockchains and distributed consensus mechanisms are touted as fault-tolerant, attack-resistant, and collusion-proof because they are decentralized. Recent analyses,…
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…
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…
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.…
Lending pools are decentralized applications which allow mutually untrusted users to lend and borrow crypto-assets. These applications feature complex, highly parametric incentive mechanisms to equilibrate the loan market. This complexity…
Current cryptocurrencies, starting with Bitcoin, build a decentralized blockchain-based transaction ledger, maintained through proofs-of-work that also generate a monetary supply. Such decentralization has benefits, such as independence…
This work explores the formation and propagation of systemic risks across traditional finance (TradFi) and decentralized finance (DeFi), offering a comparative framework that bridges these two increasingly interconnected ecosystems. We…