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Decentralized Finance (DeFi) is a new financial industry built on blockchain technologies. Decentralized financial services have consequently increased the ability to lend, borrow, and invest in decentralized investment vehicles, allowing…

Portfolio Management · Quantitative Finance 2022-09-27 Hugo Inzirillo , Stanislas de Quenetain

Decentralized Finance (DeFi) is a new paradigm in the creation, distribution, and utilization of financial services via the integration of blockchain technology. Our research conducts a comprehensive introduction and meticulous…

Cryptography and Security · Computer Science 2023-12-04 Erya Jiang , Bo Qin , Qin Wang , Zhipeng Wang , Qianhong Wu , Jian Weng , Xinyu Li , Chenyang Wang , Yuhang Ding , Yanran Zhang

Systemic risk refers to the overall vulnerability arising from the high degree of interconnectedness and interdependence within the financial system. In the rapidly developing decentralized finance (DeFi) ecosystem, numerous studies have…

Risk Management · Quantitative Finance 2026-01-14 Shiyu Zhang , Zining Wang , Jin Zheng , John Cartlidge

DeFi, or Decentralized Finance, is based on a distributed ledger called blockchain technology. Using blockchain, DeFi may customize the execution of predetermined operations between parties. The DeFi system use blockchain technology to…

Cryptography and Security · Computer Science 2023-04-27 Wenkai Li , Jiuyang Bu , Xiaoqi Li , Hongli Peng , Yuanzheng Niu , Yuqing Zhang

Decentralized Finance (DeFi) refers to financial services that are not necessarily related to crypto-currencies. By employing blockchain for security and integrity, DeFi creates new possibilities that attract retail and institution users,…

Cryptography and Security · Computer Science 2024-04-18 Krzysztof Gogol , Christian Killer , Malte Schlosser , Thomas Bocek , Burkhard Stiller , Claudio Tessone

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

Financial markets are undergoing an unprecedented transformation. Technological advances have brought major improvements to the operations of financial services. While these advances promote improved accessibility and convenience,…

Trading and Market Microstructure · Quantitative Finance 2023-12-05 Agostino Capponi , Garud Iyengar , Jay Sethuraman

In this paper, we propose a fully decentralized and smart contract-based insurance protocol. We identify various issues in the Decentralized Finance (DeFi) insurance context and propose a solution to overcome these shortcomings. We…

General Finance · Quantitative Finance 2022-12-21 Matthias Nadler , Felix Bekemeier , Fabian Schär

We derive five tractable credit risk metrics for DeFi lending vault depositors, grounded in a formal three level decomposition of vault risk into mechanical loss channels (Level 1), governance quality (Level 2) and smart contract code…

Risk Management · Quantitative Finance 2026-04-22 Anastasiia Zbandut , Carolina Goldstein

Recently emerging Decentralized Finance (DeFi) takes the promise of cryptocurrencies a step further, leveraging their decentralized networks to transform traditional financial products into trustless and transparent protocols that run…

Cryptography and Security · Computer Science 2021-06-28 Bowen Liu , Pawel Szalachowski , Jianying Zhou

This paper investigates the evolving landscape of decentralized finance (DeFi) by examining its foundational concepts, research trends, and ecosystem. A bibliometric analysis was conducted to identify thematic clusters and track the…

Computational Engineering, Finance, and Science · Computer Science 2024-12-03 Carlos J. Costa

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…

Computer Science and Game Theory · Computer Science 2025-06-19 Massimo Bartoletti , Enrico Lipparini

Decentralized Finance (DeFi), a blockchain powered peer-to-peer financial system, is mushrooming. Two years ago the total value locked in DeFi systems was approximately 700m USD, now, as of April 2022, it stands at around 150bn USD. The…

Cryptography and Security · Computer Science 2022-09-16 Sam M. Werner , Daniel Perez , Lewis Gudgeon , Ariah Klages-Mundt , Dominik Harz , William J. Knottenbelt

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

Decentralised Finance (DeFi) applications constitute an entire financial ecosystem deployed on blockchains. Such applications are based on complex protocols and incentive mechanisms whose financial safety is hard to determine. Besides,…

Software Engineering · Computer Science 2022-09-19 Massimo Bartoletti , James Chiang , Tommi Junttila , Alberto Lluch Lafuente , Massimiliano Mirelli , Andrea Vandin

Decentralized finance (DeFi) borrowing and lending platforms are crucial to the decentralized economy, involving two main participants: lenders who provide assets for interest and borrowers who offer collateral exceeding their debt and pay…

Computational Engineering, Finance, and Science · Computer Science 2024-07-16 Mahsa Bastankhah , Viraj Nadkarni , Xuechao Wang , Chi Jin , Sanjeev Kulkarni , Pramod Viswanath

Decentralized Finance (DeFi) has reshaped the possibilities of reserve banking in the form of the Collateralized Debt Position (CDP). Key to the safety of CDPs is the money supply architecture that enables issued debt to maintain its value.…

Risk Management · Quantitative Finance 2024-07-19 Yuval Boneh

Decentralized Finance (DeFi) money markets have seen explosive growth in recent years, with billions of dollars borrowed in various cryptocurrency assets. Key to the safety of money markets is the implementation of interest rates that…

Risk Management · Quantitative Finance 2024-07-16 Yuval Boneh

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

Permissionless blockchains offer an information environment where users can interact privately without fear of censorship. Financial services can be programmatically coded via smart contracts to automate transactions without the need for…

General Finance · Quantitative Finance 2022-12-13 Kanis Saengchote
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