Do vulnerabilities in Decentralized Finance (DeFi) destabilize traditional short-term funding markets? While the prevailing ``Contagion Hypothesis'' posits that stablecoin reserve liquidations may transmit distress to traditional markets through fire-sale pressure, we document a short-horizon ``Flight-to-Quality'' pattern in the opposite direction. In the wake of major DeFi exploits, spreads on 3-month AA-rated commercial paper (CP) tend to narrow rather than widen. We interpret this pattern as consistent with a ``liquidity-recycling'' channel: capital leaving DeFi may be re-intermediated into traditional cash-management markets, with regulatory segmentation under SEC Rule 2a-7 making prime-eligible paper a plausible marginal destination. Because we do not directly observe daily fund-level routing into prime money market funds, this mechanism is inferred from pricing patterns and monthly holdings evidence rather than directly identified. The result is specific to exploit-driven operational shocks, this U.S. CP spread, and short event windows.
We develop a model of aberrant behavior by Bitcoin miners and test it with a new 2017-2025 dataset.Miners' rewards, comprised partly of user fees, exhibit variability across blocks of transactions.When large reward disparities exist between adjacent blocks, miners have incentives to attempt alternative versions of prior blocks and claim other miners' rewards for themselves.Regression analysis shows that fee differentials are associated with these attacks and longer waiting times between blocks.These patterns imply potential destabilization of the Bitcoin blockchain as future mining rewards become more volatile due to gradual withdrawal of fixed block subsidies.
Bitcoin is the largest digital asset class by market capitalisation, yet the overwhelming majority of its circulating supply remains economically idle. As of early 2026, approximately 19.8 million BTC have been mined, worth roughly $1.7 to $2.0 trillion at prevailing prices, distributed across cold wallets, exchange-traded fund (ETF) custody structures, and corporate treasuries. Less than 1% of circulating BTC participates in decentralised finance (DeFi) protocols, compared with an estimated 10 to 15% of Ethereum’s supply deployed in DeFi applications and approximately 28 to 30% when Ethereum’s native proof-of-stake staking is included, a network-security participation mechanism that has no direct equivalent at Bitcoin’s base layer. This paper argues that the persistence of this dormancy is not primarily a regulatory problem but an architectural one: the absence of programmable, trust-minimised financial infrastructure capable of deploying BTC productively at scale without requiring holders to relinquish effective control. I define Bitcoin activation as the deployment of previously idle BTC into productive financial uses, including lending, staking, liquidity provision, and restaking, through mechanisms that are trust-minimised, auditable on-chain, and preserve holder sovereignty over the underlying asset. The paper identifies three primary pools of idle Bitcoin, quantifies the scale of capital inactivity, examines the institutional and technical constraints that sustain it, and evaluates the emergence of Bitcoin decentralised finance (BTCFi) as a credible architectural response. Total value locked in BTCFi protocols grew from approximately $307 million to $6.5 billion in 2024, representing over 2,000% increase, driven largely by Babylon Protocol’s native staking infrastructure. I situate this growth within the broader institutional trajectory of Bitcoin’s adoption as a reserve asset and argue that BTCFi constitutes necessary infrastructure for the next phase of the Bitcoin network’s financial and security evolution. I identify open research questions regarding minimum viable institutional infrastructure, regulatory classification of on-chain BTC yield, and systemic risk in large-scale activation scenarios.
This study aimed to develop a conceptual model for pricing digital assets by integrating behavioral finance perspectives and identifying psychological and social factors influencing investors’ decision-making in decentralized markets. A qualitative grounded theory approach was adopted. The study involved 15 experts in digital currencies, blockchain, and behavioral finance selected through purposive sampling until theoretical saturation was achieved. Data were collected via semi-structured interviews and textual content analysis. Open, axial, and selective coding were applied to build the theoretical framework. Reliability was confirmed using quality control indices such as Krippendorff’s alpha, Holsti coefficient, Scott’s Pi, and Cohen’s Kappa, all indicating high inter-coder agreement. The resulting model captured multiple determinants of digital asset pricing. Causal factors included emotional and psychological behaviors (e.g., fear of missing out, fear and greed), the influence of news and media, and social association effects. Contextual factors encompassed uncertainty, ambiguity, and market volatility. Strategic factors such as market trust and credibility, investors’ knowledge and awareness, and reference points were identified. Core conditions included regulatory and legal environments, technological infrastructure, and macroeconomic conditions. Consequences involved enhanced market transparency, analysts’ and advisors’ influence, institutional and retail investor interactions, and the impact of past experiences on risk-taking. The proposed behavioral finance-driven model demonstrates that digital asset pricing extends beyond classical economic frameworks, heavily shaped by investor psychology and external information dynamics. The findings can guide investors toward more rational strategies and support policymakers in creating effective regulations and safer decentralized financial ecosystems.
Disasters and pandemics have adverse effects on both lives and economies, requiring timely and adequate funding for relief efforts. However, traditional donation systems often face challenges such as funding delays and public distrust. This paper proposed Funding Blocks (FunB)s, a decentralized donation software built on the Tezos blockchain (TzBlockchain). It ensures transparency, accountability, and security in a trustless environment. Smart contracts powered by the Tezos network’s proof-of-stake consensus algorithm facilitate automatic tamper-proof execution of donation transactions. This helps in eliminating intermediaries and reducing administrative costs. The platform’s decentralized nature enhances scalability and resilience, enabling swift response to global calamities. It offers a user-friendly interface for direct contributions, incorporating mechanisms to verify and validate charitable organizations. It also provides real-time tracking of funds, ensuring transparent visibility to donors. By leveraging blockchain technology, FunBs addresses funding challenges, accelerates response times, and enhances the efficiency of disaster relief efforts. This model contributes to creating a sustainable and resilient funding ecosystem that empowers individuals and organizations to make secure and transparent contributions during crises
Jan 1, 2026·Proceedings of the ... Annual Hawaii International Conference on System Sciences/Proceedings of the Annual Hawaii International Conference on System Sciences
Blockchain, originally developed to solve the double-spending problem in digital currencies like Bitcoin, has evolved into a foundational technology with broad applications across public and private sectors.Its key features-immutability, decentralized trust, and cryptographic security-enable authenticated data sharing without the need for a central authority.This is particularly valuable in systems like supply chains, where participants may not know or trust each other.Smart contracts further enhance blockchain's utility by automating agreements through code, reducing uncertainty and fostering trust among stakeholders.The rise of the decentralized web, combined with emerging technologies like IoT, AI, and AR/VR, signals a wave of disruptive innovation whose full impact is yet to be seen.Given the rapid pace of development, academic research is essential to understand and guide blockchain's evolution.Conferences are especially important for timely knowledge dissemination, as they can keep up with the fast-moving nature of the field better than traditional journals.This mini-track builds on a series of successful sessions from HICSS conferences (HICSS-51 through HICSS-58), which have focused on blockchain's impact in areas such as fintech, transformation, and innovation.Over the years, it has served as a valuable forum for exploring blockchain technology and its implications for process improvement and innovation.For the current edition, six accepted papers contribute to expanding the academic understanding and supporting broader adoption of blockchain solutions.The first paper, "Playing Strategic Games in The Open Network (TON): Analyzing the Robustness of Proof-of-Stake Slashing Incentives", by Sascha Hgele, analyzes how rational validators in the TON blockchain respond to slashing penalties in a proof-of-stake system.Using a game-theoretic model, it reveals that when penalty enforcement is uncertain, validators strategically weigh risks and rewards, which impacts
With the rapid development of financial technology and the digital economy, fraud detection in financial transactions faces increasing challenges due to complex transaction networks, temporal dependencies, and nonlinear interactions.This study proposes an RL-LGNN framework that integrates long short-term memory (LSTM) networks, graph neural networks (GNN), and reinforcement learning (RL) for fraud detection in the financial transaction settlement process.LSTM is used to encode historical transactions as temporal sequences and extract time-dependent behavioural features.GNN then models inter-node transaction relationships and captures structural information from the transaction graph.On this basis, RL is introduced to dynamically optimise the detection strategy, thereby improving model adaptability and robustness.Experimental results on both public and real-world datasets show that the proposed framework outperforms conventional methods and achieves fraud detection accuracy above 90%.The proposed framework provides an effective solution for fraud detection in financial transaction settlement.
The convergence of fundamental blockchain technology with the Ethereum network has ushered in a new era of decentralized innovation, moving beyond simple cryptocurrency transactions to a programmable, trustless ecosystem. By introducing smart contracts—self-executing, automated agreements—and the Ethereum Virtual Machine (EVM), Ethereum acts as a decentralized \\\"world computer\\\" that allows for the creation of decentralized applications (dApps) across numerous sectors, including finance, healthcare, and supply chain management. In recent years, blockchain technology has gained significant attention for its potential in various domains. However, the lack of interoperability between different blockchain platforms poses a significant challenge in meeting the demands of the modern world. To address this issue, our research focuses on unlocking blockchain interconnectivity through smart contract-driven cross-chain communication. We aim to contribute to the development of a model that enhances the functionality and usability of blockchain technology. To achieve interoperability, we explore various options and leverage the power of smart contracts.
Dr.B.Swathi Dr.B.Swathi, MOHAMMAD SANA, DAMERUPPULA SAI KIRAN, JADI GANESH · 5 authors
The quick rise of digital technologies has shown how blockchain could improve business operations by making them safer, more open, and less centralized. Most blockchain solutions, on the other hand, are made for big businesses, which makes it hard for small and medium-sized businesses (SMEs) to use them because they are too expensive, too complicated, and not modular. This study suggests a blockchain-based framework designed specifically for small and medium-sized businesses (SMEs) to make digital transformation more affordable. The framework includes stable consensus protocols, governance mechanisms, and important services like Decentralized Identity (DID), Zero-Knowledge Proofs (ZKP), and Digital Asset Management (DAM). It is meant to be modular, scalable, and simple to connect to current business systems. Experimental testing shows that SMEs are more efficient, secure, and easy to use. The proposed framework lowers the barriers to entry and lets small and medium-sized businesses use blockchain for new ideas, better operations, and safe online transactions.
We propose Proof of Witness (PoWit), a novel consensus mechanism for digital currency that replaces energy-intensive mining and capital-based staking with independent third-party witness verification. In PoWit, each transaction requires cryptographic signatures from three parties: sender, receiver, and a randomly selected witness. The witness validates the sender’s balance and transaction history before signing, eliminating the need for global consensus while maintaining security guarantees. Our simulation with 10,000 users demonstrates 100% double-spending prevention (n = 10, 000, 99% CI [99.93%, 100%]), 113.9 transactions per second, and complete chain integrity. The non-selective witness assignment achieves theoretical randomness with only 0.27% deviation, making collusion attacks impractical. PoWit offers a sustainable alternative to Proof of Work and Proof of Stake, with significantly lower energy consumption and fairer participation model.
Distributed Ledger Technology (DLT) is considered to be used in processing crypto assets, constructing smart contracts and data governance. As the evidence shows that application of this technology has become beneficial, number of business models created by this technology is increasingly large. However, in Myanmar, not all of business models attributed to this technology are legally allowed yet. This fact made the research to explore why there was a ban on minting crypto currency in Myanmar. However, other opportunities to use the cryptographic and block-chain concepts have not been blocked. Based on the guidance and pro and con articulations relating to this cutting-edge technology, this research offers the view that the Central Bank of Myanmar is responsible in opening up more business models. The bank requires revisiting its order or issuing the supplemental manual not to abuse the advanced technology
We study the role of liquid staking and how it affects the interaction between issuance policy, economic productivity, and security in proof-of-stake blockchains, with a focus on the role of liquid staking. In a dynamic macro-finance framework, we show that issuance redistributes resources from productive on-chain activity to validators, which effectively acts as a tax on productive capital. This mechanism generates a Laffer-curve-type tradeoff: beyond an interior optimum, higher issuance weakens the productive base that finances security and reduces staking rewards. We then introduce liquid staking, which allows users to earn staking rewards while retaining liquidity for productive use. Liquid staking collapses the traditional tradeoff between staking and DeFi. When liquid staking tokens (LSTs) closely substitute for the native asset and benefit from strategic complementarities, issuance reallocates productive activity toward LSTs, compresses the feasible policy space, and can render issuance and slashing ineffective as policy instruments.
Este estudo analisa a arquitetura da interoperabilidade no ecossistema <b>Ethereum</b>, investigando como a padronização de interfaces e os mecanismos de comunicação entre contratos sustentam a natureza compostável da <b>Web3</b>. A pesquisa detalha a evolução dos padrões de tokens, partindo do <b>ERC-20</b> para ativos fungíveis, passando pelo <b>ERC-721</b> para ativos não-fungíveis (NFTs), até o advento do <b>ERC-1155</b>, que permite a gestão multi-token em um único contrato, otimizando custos de transação (<i>gas</i>).Além dos padrões, o texto explora os mecanismos de comunicação <i>cross-contract</i>, como o delegatecall, essenciais para a criação de sistemas modulares e contratos atualizáveis. No entanto, a obra ressalta que a interoperabilidade amplia a superfície de ataque, destacando a vulnerabilidade de <b>reentrância</b> e a importância do padrão <i>Checks-Effects-Interactions</i> para mitigar riscos financeiros. Por fim, o trabalho discute fronteiras emergentes, como o padrão <b>ERC-6551</b> (tokens vinculados a contas) e a necessidade de soluções seguras para a interoperabilidade entre diferentes blockchains (<i>cross-chain</i>).<br>
This paper introduces the Blockchain First-Principles Analysis (BFPA) framework, a novel methodology for the epistemic evaluation of distributed ledger systems. Unlike conventional blockchain assessment approaches that rely on performance metrics, tokenomics, or decentralization indices, BFPA constructs a rigorous derivation chain from physical laws and cryptographic assumptions through an action axiom to concrete protocol design decisions. The framework systematically identifies structural failure points by testing whether each design choice is derivable from foundational axioms or represents an ad hoc decision vulnerable to obsolescence. The framework introduces several analytical innovations: (i) a four-level axiom hierarchy anchoring evaluation in physics, cryptography, praxeology, and social consensus; (ii) a Nash equilibrium gate mechanism for social layer stability; (iii) a four-stage stability profile progressing from Nash equilibrium through evolutionarily stable strategies and lock-in to self-referential feedback; (iv) a lock-in typology distinguishing design-emergent, ecosystem-emergent, corporate-imposed, and regulatory-granted lock-in; and (v) a network effect genesis model identifying five necessary conditions for spontaneous adoption without marketing. We apply the framework systematically to eight major blockchain systems: Bitcoin, Ethereum, Solana, Monero, XRP, Polkadot, Tezos, and BNB Chain. The analysis reveals that epistemic design quality alone correlates weakly with market price and adoption. Lock-in type and network effect genesis conditions are substantially stronger predictors. This finding provides a principled explanation for two empirical puzzles: the Tezos Paradox (superior governance design, declining price) and the Monero Paradox (strong epistemic foundations, stagnant adoption). The framework provides a falsifiable, non-speculative methodology for institutional evaluation of blockchain systems as coordination mechanisms.
Like many other subject areas, technological progress is also transforming the world of securities. New technological solutions and opportunities may lead to the emergence of new institutions, including new legal institutions. The distributed ledger technology enabling the operation of well-known cryptocurrencies is – among many other things – a tool suitable for the registration of securities; although it has not yet become widespread, some countries have already established the legal framework for its application. This study presents a comparative analysis of existing European regulatory solutions to demonstrate the options available for establishing an effective regulatory framework for securities recorded on a distributed ledger and the benefits of introducing such a securities registration system from both a regulatory and a practical perspective.
Abstract Originally designed to support cryptocurrencies like Bitcoin, blockchain technology has evolved into a powerful tool with applications far beyond digital currency. This paper explores how blockchain is transforming software development by enabling decentralized, secure, and transparent systems. Key areas of focus include digital identity verification, smart contract automation, supply chain tracking, decentralized data storage, and secure e-governance solutions such as digital voting. The study outlines fundamental blockchain components—such as distributed ledgers, consensus mechanisms, and tokenization—and explains how they contribute to building tamper-resistant applications. It also examines blockchain’s role in powering Web3 technologies, decentralized finance (DeFi), and cross-chain interoperability. Through real-world case studies in healthcare, logistics, and digital governance, the paper highlights the tangible benefits of blockchain-based solutions while acknowledging current limitations like scalability, energy use, and regulatory issues. The analysis offers a forward-looking perspective on how software developers and organizations can harness blockchain to create resilient, next-generation applications.
A recurring narrative in digital-asset markets holds that tokens of protocols with "real revenue" are fundamentally cheaper and should outperform. I test this directly using the full cross-section of fee- and revenue-reporting protocols tracked by DefiLlama (2,259 protocols; 345 with a traded market capitalization) and one year of daily price and market-capitalization data. Three findings emerge. First, valuation is economically disconnected from revenue at the level of the market: a single asset (Bitcoin) accounts for 90.5% of sample market capitalization, tokens with essentially no measurable protocol revenue represent roughly 92% of market capitalization, and even among application protocols revenue multiples are extraordinarily dispersed (median price-to-revenue of 9.0× spanning well below 1× to effectively unbounded). Second, in the cross-section of forward returns, the formation-date revenue multiple has no power to discriminate winners from losers: over a window in which the median token fell 78.7% and only 5.3% of tokens posted a positive return, the rank correlation between price-to-revenue and the subsequent twelve-month return is statistically zero (Spearman ρ = 0.04), and is unchanged after controlling for size and asset class (slope on log price-to-revenue = -0.0004, p = 0.98). Third, in a monthly Fama-MacBeth panel the relationship is, if anything, weakly anti-value (mean ρ = +0.063, t = 2.18): cheaper-on-revenue tokens did marginally worse, not better. The evidence does not support a revenue-based value premium in this market and period; the dominant force in returns was a near-uniform sector-wide repricing. Results are specific to a single, predominantly bearish regime and to a universe conditioned on revenue generation, limitations I discuss in detail. AI-use disclosure: The author used a large language model (Anthropic's Claude) to assist with data-collection scripting, routine statistical computation, and manuscript drafting and editing; all research-design choices, the analysis, and the conclusions are the author's own.
Early cryptocurrency discourse centered on digital scarcity as the primary source of value in non-sovereign monetary systems. While scarcity was foundational to the emergence of cryptoassets, the rapid diversification of distributed ledger architectures has increasingly decoupled scarcity from long-term value attribution. This paper argues that cryptoassets may be entering a post-scarcity phase in which value formation is driven less by fixed supply and more by settlement capacity, infrastructural interoperability, and the efficient clearing of obligations. Drawing on historical financial practices, internet protocol development, and contemporary ledger architectures, the paper proposes a structural distinction between asset-centric and protocol-centric systems. It suggests that mature crypto valuation may increasingly reflect the role of ledgers as settlement infrastructure rather than as bearer assets. The analysis is descriptive rather than prescriptive and does not privilege any specific network or token.
本文梳理分布式账本技术在金融交易中的前沿进展，分析其对支付结算、资产登记、监管审计和风险治理的影响。采用文献分析与比较研究方法，选取国内外标准化报告、国际组织研究、监管文件和典型项目材料，从技术架构、金融功能、资产形态、风险类型与治理要求五个维度进行归纳。结果：分布式账本技术已不再局限于加密资产记账，而是逐渐进入跨境支付、资产代币化、稳定币结算、供应链金融、证券登记清算、监管科技和央行数字货币相关基础设施等场景。本文进一步通过Project Agorá、mBridge、Project Guardian、Terra/Luna、数字人民币与BSN等代表性项目或案例进行横向比较，指出不同方案在开放性、可控性、结算最终性、资产确权、合规嵌入和治理责任方面存在明显差异。研究认为，DLT的金融价值主要体现为多主体共享可验证记录、缩短对账链条、支持可编程结算和提升监管可验证性，而不是简单替代金融中介。综上，DLT的大规模金融应用应在效率提升与风险控制之间取得平衡，重点完善隐私保护、法律确权、智能合约安全、跨链互操作、失败处置机制和跨境监管协同。This paper reviews recent developments in distributed ledger technology (DLT) for financial transactions and explains how these developments affect payment and settlement, asset registration, regulatory audit and risk governance. A literature-based and comparative research approach is adopted. The discussion is organised around five dimensions: technical architecture, financial function, asset form, risk type and governance requirement. This revised version adds representative comparisons of Project Agorá, mBridge, Project Guardian, Terra/Luna, e-CNY and BSN, and argues that DLT should be understood as an infrastructure for verifiable coordination rather than a simple substitute for financial intermediaries. Its large-scale adoption depends on technical performance, legal recognition, privacy protection, interoperability standards, smart contract security and cross-jurisdictional regulatory coordination.
System based on blockchain technology and smart contracts. The system aims to address the growing problem of managing and transferring digital assets such as cryptocurrency wallets, domains, cloud storage, NFTs, and gaming assets after the owner’s death. The proposed solution introduces a Dead Man’s Switch mechanism, where users are required to perform periodic check-ins. In case of prolonged inactivity, the system automatically triggers a smart contract that securely transfers access to designated heirs. The system leverages blockchain technology to ensure transparency, immutability, and security, while decentralized storage (IPFS) is used to protect sensitive data through encryption. The platform integrates modern technologies including Ethereum, Solidity, Web3.js, and decentralized storage solutions to provide a fully automated, secure, and trustless inheritance process without relying on centralized authorities or complex legal procedures. This work was conducted at Arab International University (AIU), Syria. The official website of the university is: https://www.aiu.edu.sy