Particular Problem on Decentralized Finance (DeFi) – Blockchain Analysis Lab

The journal is a high tier peer-reviewed educational and practitioner journal that publishes high-quality articles with a give attention to digital finance and innovation in addition to on the evaluation of digital and web improvements on monetary companies and the financial system. The journal publishes theoretical or empirical, qualitative or quantitative papers of curiosity to teachers, practitioners, and regulators with the emphasis on empirical, monetary market, and funding innovation, monetary coverage analysis and suggestions associated to bettering the welfare within the digital financial system.

In regards to the Particular Problem

Hyperlink to the particular concern: https://www.springer.com/journal/42521/updates/20051576

Overview:

Decentralized Finance (DeFi) describes open monetary techniques on distributed ledgers that don’t require belief in intermediaries. Processes previously provided by centralized intermediaries (e.g. banks or brokers) are changed by decentralized protocols within the type of good contracts (Ante, 2021; Chen and Bellavitis, 2020).

DeFi shifts governance, empowerment, participation, but in addition dangers between stakeholders. It consists of a multi-layered structure, which builds on base layer settlement infrastructures most frequently within the type of blockchains, similar to Ethereum, Solana, Avalanche, Fantom or Polygon. On high of that, further layers exist for protocols, belongings, functions and aggregation (Schär, 2021).

The DeFi market has grown exponentially since 2020 and continues to generate a gentle stream of recent improvements, decentralized functions (dApps) and enterprise fashions. Decentralized protocols within the type of good contracts autonomously handle crypto-assets value over 100 billion {dollars} and allow functions similar to lending (Bartoletti et al., 2021a), buying and selling (Angeris, 2019; Neuder et al., 2021) or asset administration (e.g., popsicle.finance). The quick tempo of the DeFi setting represents each a problem and a possibility for academia. Whereas DeFi markets evolve at fast tempo and thus exhausting to trace, they’re absolutely clear and thus produce monumental portions of (“on-chain”) information from many sources and in a wide range of codecs. This presents a promising foundation for empirical analysis.

The idea of tokenization has spawned a wide range of digital tokens, crypto-assets and protocols that populate the DeFi ecosystem. One sort of digital token and a significant facet of DeFi markets are stablecoins, digital tokens that peg their worth to an underlying asset. Exemplary stablecoin-related analysis consists of worth processes and arbitrage (Pernice, 2021), issuances (Griffin and Shams, 2020; Ante et al., 2021a), transfers (Ante et al., 2021b) or the steadiness of stablecoin costs (Hoang and Baur, 2021). Additional phenomena of the DeFi market are digital tokens gross sales, digital reserve currencies, non-fungible tokens (NFTs), so-called “meme cash”, safety tokens, fan tokens (e.g., of sport golf equipment), governance tokens or decentralized autonomous organizations (DAOs).

Decentralized exchanges (DEXes) and automatic market makers (AMMs) (Bartoletti et al., 2021b), like Uniswap v3 (Neuder et al., 2021) or Sushiswap have developed into main buying and selling protocols with billions in buying and selling volumes. They permit DeFi customers to commerce tokens straight from their pockets and and not using a central counterparty. This has resulted in a plethora of challenges, potentials and potentialities to be studied by academia. This consists of, for instance, the problem of impermanent loss (IL) (Aigner and Dhaliwal, 2021), the economics of cross-listings (Meyer and Ante, 2020), flash loans (Qin et al., 2021a, 2021b), high-frequency buying and selling (Zhou et al., 2021), miner extractable worth (MEV) (Daian et al., 2020), rebalancing of capital, hedging of liquidity supplier positions, profitability evaluation or capital allocation methods. Additional phenomena of the DeFi market are, for instance, lending, aggregation or by-product protocols.

Goal and subjects:

For this Particular Problem, we invite rigorous and well timed theoretical, empirical, qualitative or quantitative analysis that develops a greater understanding of DeFi as a phenomenon, its market(s), protocols, belongings and functions. Most significantly, we’re centered on progressive analysis that may analyze previous developments and occasions to sharpen our understanding of the evolving position of the DeFi ecosystem. The wise and considerate progress of DeFi is integral to the liberalization and democratization of monetary markets and their governance. Due to this fact, we assist research that may generate sensible and theoretical implications.

To this finish, and in keeping with the purpose and scope of the journal, we’re concerned with high-quality submissions that embrace various methodological approaches and theoretical frameworks, make use of wealthy new datasets protecting completely different DeFi layers, protocols, belongings and functions, or examine the position of DeFi extra broadly.

The next are some choose, non-comprehensive examples of potential analysis subjects:

• Crypto-assets (e.g., cryptocurrencies, stablecoins, non-fungible tokens (NFTs), meme cash, fan tokens, safety tokens, central financial institution digital forex (CBDC), and many others.)
• Decentralized exchanges (DEXes) and automatic market makers (AMMs)
• DeFi protocols (e.g., lending, staking, governance, bridging, spot buying and selling, derivatives, insurance coverage and many others.)
• Optimization, aggregation and strategic asset allocation in DeFi markets (e.g., yield farming, liquidity provision, Uniswap v3 worth ranges, arbitrage, effectivity of aggregation protocols similar to 1inch, Matcha or CowSwap)
• Adoption, psychology, notion and understanding of cryptocurrency, blockchain and DeFi
• The position of on-chain information for the market effectivity of crypto-assets and DeFi protocols; new metrics or frequent threat components
• Financial evaluation of blockchain- or DeFi-specific mechanisms and occasions (e.g., miner extractable worth (MEV), flash loans, sandwich assaults, hacks, change listings, airdrops, and many others.)
• Governance in DeFi protocols and decentralized autonomous organizations (DAOs) and the position of native protocol tokens
• Implications of cross-chain or layer-2 options (e.g., cross-chain arbitrage, relevance of transaction prices for adoption, and many others.)

If you’re not sure whether or not your analysis matter might match into the particular concern or the journal’s scope, please contact the Particular Problem’s editor through e mail.

Editor of the Particular Problem:

Lennart Ante, Co-Founder & Researcher, Blockchain Analysis Lab gGmbH, Germany, ante@blockchainresearchlab.org

Necessary Dates:

Deadline for paper submission: 31 July 2022

References:

1. Aigner, A. A., & Dhaliwal, G. (2021). UNISWAP: Impermanent Loss and Danger Profile of a Liquidity Supplier. arXiv preprint arXiv:2106.14404.
2. Angeris, G., Kao, H. T., Chiang, R., Noyes, C., & Chitra, T. (2019). An evaluation of Uniswap markets. arXiv preprint arXiv:1911.03380.
3. Ante, L. (2021). Good contracts on the blockchain – A bibliometric evaluation and evaluation. Telematics & Informatics, 57, 101519. https://doi.org/10.1016/j.tele.2020.101519
4. Ante, L., Fiedler, I. & Strehle E. (2021a). The affect of stablecoin issuances on cryptocurrency markets. Finance Analysis Letters, 41, 101867. https://doi.org/10.1016/j.frl.2020.101867
5. Ante, L., Fiedler, I. & Strehle, E. (2021b). The influence of clear cash flows: Results of stablecoin transfers on the returns and buying and selling quantity of Bitcoin. Technological Forecasting and Social Change, 170, 120851. https://doi.org/10.1016/j.techfore.2021.120851
6. Bartoletti M., Chiang J.H., Lafuente A.L. (2021a) SoK: Lending Swimming pools in Decentralized Finance. In: Bernhard M. et al. (eds) Monetary Cryptography and Knowledge Safety. FC 2021 Worldwide Workshops. FC 2021. Lecture Notes in Laptop Science, vol 12676. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-63958-0_40
7. Bartoletti, M., Chiang, J. H. Y., & Lluch-Lafuente, A. (2021b). A principle of Automated Market Makers in DeFi. In Worldwide Convention on Coordination Languages and Fashions (pp. 168-187). Springer, Cham. https://doi.org/10.1007/978-3-030-78142-2_11
8. Chen, Y., & Bellavitis, C. (2020). Blockchain disruption and decentralized finance: The rise of decentralized enterprise fashions. Journal of Enterprise Venturing Insights, 13, e00151. https://doi.org/10.1016/j.jbvi.2019.e00151
9. Daian, P., Goldfeder, S., Kell, T., Li, Y., Zhao, X., Bentov, I., … & Juels, A. (2020). Flash boys 2.0: Frontrunning in decentralized exchanges, miner extractable worth, and consensus instability. In 2020 IEEE Symposium on Safety and Privateness (SP) (pp. 910-927). IEEE. https://doi.org/10.1109/SP40000.2020.00040
10. Griffin, J. M., & Shams, A. (2020). Is Bitcoin actually untethered? The Journal of Finance, 75(4), 1913-1964. https://doi.org/10.1111/jofi.12903
11. Hoang, L. T. & Baur, D. G.  (2021) How secure are stablecoins? The European Journal of Finance, 1949369. https://doi.org/10.1080/1351847X.2021.1949369
12. Neuder, M., Rao, R., Moroz, D. J., & Parkes, D. C. (2021). Strategic Liquidity Provision in Uniswap v3. arXiv preprint arXiv:2106.12033.
13. Meyer, A. & Ante, L. (2020). Results of preliminary coin providing traits on cross-listing returns. Digital Finance, 2(3), 259–283. https://doi.org/10.1007/s42521-020-00025-z
14. Pernice I.G.A. (2021) On Stablecoin Value Processes and Arbitrage. In: Bernhard M. et al. (eds) Monetary Cryptography and Knowledge Safety. FC 2021 Worldwide Workshops. FC 2021. Lecture Notes in Laptop Science, vol 12676. Springer, Berlin, Heidelberg.
15. Schär, F. (2021). Decentralized finance: On blockchain-and good contract-based monetary markets. Federal Reserve Financial institution of St. Louis Assessment, Second Quarter 2021, pp. 153-74.
16. Qin Ok., Zhou L., Livshits B., Gervais A. (2021a) Attacking the DeFi Ecosystem with Flash Loans for Enjoyable and Revenue. In: Borisov N., Diaz C. (eds) Monetary Cryptography and Knowledge Safety. FC 2021. Lecture Notes in Laptop Science, vol 12674. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-64322-8_1
17. Qin, Ok., Zhou, L., & Gervais, A. (2021b). Quantifying Blockchain Extractable Worth: How darkish is the forest? arXiv preprint arXiv:2101.05511.
18. Zhou, L., Qin, Ok., Torres, C. F., Le, D. V., & Gervais, A. (2021). Excessive-frequency buying and selling on decentralized on-chain exchanges. In 2021 IEEE Symposium on Safety and Privateness (SP) (pp. 428-445). IEEE.