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1,455 results · page 19 of 61
Marlena Broniszewska, Wiktor B. Daszczuk, Denny B. Czejdo
No abstract is available for this record.
Michel Guirguis, Michael Papasavvas
Solidity is very useful language programming in modeling investment and Finance exercises blockchain technology. The book covers BA and BS, MA and MS in Risk Management, Business Administration, Financial Services, International Business and Financial Derivatives and BS in Computational Finance. Most importantly, the book includes a range of materials to help the student, the practitioners and the investors to reinforce their learning skills in cryptocurrency programming. The market will be very responsive for our book especially that a lot of international students experience problem with their English and their numerical skills. It will cover the basic needs of postgraduate students and those who are interesting in investment and tokens creation. Readers would be able to understand token contracts. Buyers would be allowed to buy tokens using Ethers. Cryptocurrency companies could raise funds by making use of initial token offering, (ITO), by selling their tokens to other investors. The market in the next five years will become very complicated and would require the use of sophisticated risk management techniques and technological solutions in order to hedge market, operational, and credit risk. Good luck in your future career as crypto developer and investment programmer in the major investment banks such as JP Morgan, Merrill Lynch, Morgan Stanley, Deutsche Bank, Goldman Sachs, and Bank of America. I would like to thank the Schweser Kaplan organization for the professional education that covers the syllabus of the Chartered Financial Institute, (CFA). Parts of the CFA examples are used to calibrate the financial models. Please e-mail me if you have any questions or if you would like to suggest investment exercises. My e-mail is guirguismichel@gmail.com
Ellie Rennie, Jason Potts
No abstract is available for this record.
Simone Valentini, Chiara Braghin, Elvinia Riccobene
No abstract is available for this record.
Krzysztof Gogol, Robin Fritsch, Malte Schlosser, Johnnatan Messias · 6 authors
This paper studies liquid staking tokens (LSTs) on automated market makers (AMMs), both theoretically and empirically. LSTs are tokenized representations of staked assets on proof-of-stake blockchains. First, we model LST-liquidity on AMMs theoretically, categorizing suitable AMM types for LST liquidity and deriving formulas for the necessary returns from trading fees to adequately compensate liquidity providers under the particular price trajectories of LSTs. For the latter, two relevant metrics are considered: (1) losses compared to holding the liquidity outside the AMM (loss-versus-holding, or "impermanent loss"), and (2) the relative profitability compared to fully staking the capital (loss-versus-staking) which is specifically tailored to the case of LST-liquidity. Next, we empirically measure these metrics for Ethereum LSTs across the most relevant AMM pools. We find that, while trading fees often compensate for impermanent loss, fully staking is more profitable for many pools, raising questions about the sustainability of the current LST liquidity allocation to AMMs.
Dongze Li, Kejia Zhang, Shiwei Li, Gang Du · 5 authors
As decentralized finance (DeFi) grows and decentralized exchanges (DEXs) expand, the security of Ethereum smart contracts and blockchain transactions is receiving increasing scholarly attention. The ERC20 token standard has facilitated the emergence of numerous honeypot contracts, which deceive traders by allowing token purchases but blocking withdrawals. This study proposes a lightweight honeypot contract detection system integrated into the go-Ethereum client (Geth). Unlike previous work, our detector does not rely on contract interaction records or source code provided by contract creators. Instead, our approach performs static data flow analysis on contract bytecode to identify honeypot mechanisms. By focusing exclusively on the control flow of the ERC20 Transfer method, our system achieves faster detection than full-contract analysis methods, with an average processing time of 9.74 milliseconds per contract. Experiments on both known honeypot contracts and real-world token contracts demonstrate the effectiveness of our approach in detecting malicious ERC20 contracts.
Burak Öz, Danning Sui, Thomas Thiery, Florian Matthes
The MEV-Boost block auction contributes approximately 90% of all Ethereum blocks. Between October 2023 and March 2024, only three builders produced 80% of them, highlighting the concentration of power within the block builder market. To foster competition and preserve Ethereum's decentralized ethos and censorship-resistance properties, understanding the dominant players' competitive edges is essential. In this paper, we identify features that play a significant role in builders' ability to win blocks and earn profits by conducting a comprehensive empirical analysis of MEV-Boost auctions over a six-month period. We reveal that block market share positively correlates with order flow diversity, while profitability correlates with access to order flow from Exclusive Providers, such as integrated searchers and external providers with exclusivity deals. Additionally, we show a positive correlation between market share and profit margin among the top ten builders, with features such as exclusive signal, non-atomic arbitrages, and Telegram bot flow strongly correlating with both metrics. This highlights a "chicken-and-egg" problem where builders need differentiated order flow to profit, but only receive such flow if they have a significant market share. Overall, this work provides an in-depth analysis of the key features driving the builder market towards centralization and offers valuable insights for designing further iterations of Ethereum block auctions, preserving Ethereum's censorship resistance properties.
Krzysztof Gogol, Johnnatan Messias, Deborah Miori, Claudio J. Tessone · 5 authors
Arbitrage can arise from the simultaneous purchase and sale of the same asset in different markets in order to profit from a difference in its price. This work systematically reviews arbitrage opportunities between Automated Market Makers (AMMs) on Ethereum ZK rollups, and Centralised Exchanges (CEXs). First, we propose a theoretical framework to measure such arbitrage opportunities and derive a formula for the related Maximal Arbitrage Value (MAV) that accounts for both price divergences and liquidity available in the trading venues. Then, we empirically measure the historical MAV available between SyncSwap, an AMM on zkSync Era, and Binance, and investigate how quickly misalignments in price are corrected against explicit and implicit market costs. Overall, the cumulative MAV from July to September 2023 on the USDC-ETH SyncSwap pool amounts to $104.96k (0.24% of trading volume).
Darren Shannon, Michael Dowling, marjan zhaf, Barry Sheehan
Non-fungible tokens (NFTs) rose to prominence as a wide-scale implementation of blockchain technology to support the emergence of crypto-asset markets. These nascent digital markets raise questions about the behaviours of investors in the digital economy and their appetite for risk. Using 28,919 auction listings, 4937 sales, and 30,197 Telegram messages, we conduct a field study on the bidding and selling behaviours of NFT investors in a Dutch auction system. We reveal risk-seeking behaviours in our sample of Dutch auction sales. We document that time pressures and value propositions significantly influence NFT investors: fast clock speeds and greater price separations induce underbidding behaviours and are associated with low value retention for sellers. These results are confirmed using a matched-pairs analysis. Our study raises further questions on the risk preferences of investors in emergent digital marketplaces. We propose value maximisation strategies for marketplace developers and participants, while drawing attention to the presence of potentially exploitable biases and heuristics amongst participants, courtesy of bidding incentivisation schemes significantly altering how investors value NFTs. • We identify the bidding and listing behaviours of NFT investors in Dutch auctions. • 28,919 listings, 4937 sales, and the sentiment of 30,197 messages are examined. • We identify risk-seeking underbidding behaviours from NFT investors. • Time pressures, value propositions, and market experience are influential factors. • Strategies are proposed for NFT developers and traders to maximise profit.
Alex M. Pawlowski
Abstract The following contribution explains how a DAO (Decentralized Autonomous Organization) can technologically supplement the governance process in complex environments, in this case urban environments where Fab City is active. DAOs are implementations of the blockchain technology which can be considered as coordination tools and de facto “decentralized ERP* (Enterprise Resource Planning) systems on the internet”. They can enable organizations and communities to address challenges that are otherwise too complex in a tangible, dynamic and sustainable manner which caters to the general need for transition governance. To facilitate collaboration and coordination, the idea of a DAO is to effectively capture the various rule sets, actor constellations and general conditions to address the four universal problems in organizing-task division, task allocation, reward distribution, and information flows. The following conceptualization aims to provide a practical solution alternative to supplement cooperation and coordination between various actors within the wider ecosystem using a DAO. The current state of blockchain and DAO research serves as a rich backdrop when exploring the given opportunity and shedding light on the most important requirements, risks, and success factors. Despite remaining challenges in particular the legal domain, the focus of this article is to showcase how a progressive path forward can lead to a setting in which DAOs can be successfully integrated and become an operational part of an urban environment.
Douglas Wegner, Rovian Dill Zuquetto, Fernando Correa Grisi
Objective: this study aims to review the literature on DAOs in business administration and propose a framework for DAOs compared to the key features of market, hierarchy, and network governance forms and avenues for future research. Methods: we performed a systematic literature review in Scopus and Web of Science databases and identified 69 articles on DAOs published in or before March 2024 in the field of business and management. Results: we describe the main characteristics, opportunities, and challenges for DAOs. Our study also discusses how DAOs can be further explored and how they may or may not fit in different governance and organizational forms. Conclusions: we conclude by offering several guidelines to researchers who want to comprehend the phenomena of DAOs and contribute to theory and practice in business administration.
Paul van Vulpen, H.M. Heijnen, S. P. van Mens, Thijn Kroon · 5 authors
Upgradeable smart contracts allow decentralized autonomous organizations (DAOs) to address bugs, enhance security, and expand functionality post-deployment. The proxy pattern enables smart contract upgradeability but introduces admin-centric governance, where power is concentrated in a single or small number of addresses. This paper explores the potential of decentralized smart contract governance to overcome admin centric governance while achieving flexibility in governing smart contracts. We investigate the Diamond Pattern as a flexible upgradeable contract framework that allows for modular smart contracts. Using the SecureSECO DAO as a case study, we examine how the diamond pattern can be configured for decentralized governance. The used architecture allows DAOs to upgrade smart contracts collectively through community consensus, and the implementation provides proposals, votes, and execution without requiring technical knowledge. The study highlights the benefits of this approach, namely, flexibility in smart contract governance, enhanced modularity, and a single point of interaction for governance. We also discuss limitations and challenges for upgradeable smart contracts such as the decision-making delays and potential vulnerabilities. To encourage adoption of consensus governance, we call for the creation of user-friendly tooling and smart contract facets.
Sean Cao, Lin William Cong, Baozhong Yang
To understand the disruption and implications of distributed ledger technologies for financial reporting and auditing, we analyze firm misreporting, auditor monitoring and competition, and regulatory policy in a unified model. A federated blockchain for financial reporting and auditing can improve verification efficiency not only for transactions in private databases but also for cross-chain verifications through privacy-preserving computation protocols. Despite the potential benefit of blockchains, private incentives for firms and first-mover advantages for auditors can create inefficient under-adoption or partial adoption that favors larger auditors. Although a regulator can help coordinate the adoption of technology, endogenous choice of transaction partners by firms can still lead to adoption failure. Our model also provides an initial framework for further studies of the costs and implications of the use of distributed ledgers and secure multiparty computation in financial reporting, including the positive spillover to discretionary auditing and who should bear the cost of adoption. This paper was accepted by David Simchi-Levi, finance. Funding: The authors gratefully acknowledge research support from the FinTech Laboratory at J. Mack Robinson College of Business at Georgia State University, the Center for Research in Security Prices at the University of Chicago, the Ripple University Blockchain Research Initiative, and the Smith AI Initiative for Capital Market Research at the University of Maryland. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2023.02577 .
Christian Ziegler, Quinn DuPont
This note and agenda serve as a cause for thought for scholars interested in researching Decentralized Autonomous Organizations (DAOs), addressing both the opportunities and challenges posed by this phenomenon. It covers key aspects of data retrieval, data selection criteria, issues in data reliability and validity such as governance token pricing complexities, discrepancy in treasuries, Mainnet and Testnet data, understanding the variety of DAO types and proposal categories, airdrops affecting governance, and the Sybil problem. The agenda aims to equip scholars with the essential knowledge required to conduct nuanced and rigorous academic studies on DAOs by illuminating these various aspects and proposing directions for future research.
Fei Wu, Thomas Thiery, Stefanos Leonardos, Carmine Ventre
The Ethereum block-building process has changed significantly since the emergence of Proposer-Builder Separation. Validators access blocks through a marketplace, where block builders bid for the right to construct the block and earn MEV (Maximal Extractable Value) rewards in an on-chain competition, known as the MEV-boost auction. While more than 90% of blocks are currently built via MEV-Boost, trade-offs between builders' strategic behaviors and auction design remain poorly understood. In this paper we address this gap. We introduce a game-theoretic model for MEV-Boost auctions and use simulations to study different builders' bidding strategies observed in practice. We study various strategic interactions and auction setups and evaluate how the interplay between critical elements such as access to MEV opportunities and improved connectivity to relays impact bidding performance. Our results demonstrate the importance of latency on the effectiveness of builders' strategies and the overall auction outcome from the proposer's perspective.
Kane Smith, Manu Gupta, Puneet Prakash, Nanda Rangan
Purpose Ethereum-based blockchain technology (EBT) affords members of the Enterprise Ethereum Alliance (EEA) a market advantage in deploying blockchain within their organizations, including cybersecurity and operational benefits, that leads firms to strategically invest in this nascent technology. However, the impact of such strategic investments in EBT has yet to be explored in the context of its relationship to firm value. Therefore, this study explores EBT-specific firm-level characteristics that result in a stock market reaction to announcements of strategic investments. Design/methodology/approach The authors use the event study methodology, strategic investment literature and signaling theory as contextualizing frameworks for their study. Additionally, the authors explore a new method for examining technology investments as a strategic counter to cybersecurity threats. Findings Firms that signal to the market their strong commitment to their strategic investment by developing an EBT proof of concept see significantly higher market returns. Firms that have had prior cybersecurity incidents are rewarded by the market for strategically investing in EBT, and when firms with large undistributed free cash flows utilize this cash for strategic EBT investment, the market is more likely to reward these firms, indicating the market views EBT investment positively in these circumstances. Originality/value The results of this study provide new evidence of the value impact of EBT for firms that suffered cybersecurity events in the past. The authors provide empirical evidence of firm-level characteristics that investors use to discern whether a strategic investment in EBT will drive organizational value. Likewise, the authors demonstrate how signaling affects investor perceptions of strategic information technology (IT) investments in EBT.
Chen Shi-jian, Jiachi Chen, Jiangshan Yu, Xiapu Luo · 5 authors
NFTs (Non-Fungible Tokens) have seen significant growth since they first captured public attention in 2021. However, the NFT market is plagued by fake transactions and economic bubbles, e.g., NFT wash trading. Wash trading typically refers to a transaction involving the same person or two colluding individuals, and has become a major threat to the NFT ecosystem. Previous studies only detect NFT wash trading from the financial aspect, while the real-world wash trading cases are much more complicated (e.g., not aiming at inflating the market value). There is still a lack of multi-dimension analysis to better understand NFT wash trading. Therefore, we present the most comprehensive study of NFT wash trading, analyzing 8,717,031 transfer events and 3,830,141 sale events from 2,701,883 NFTs. We first optimize the dataset collected via the OpenSea API. Next, we identify three types of NFT wash trading and propose identification algorithms. Our experimental results reveal 824 transfer events and 5,330 sale events (accounting for a total of \$8,857,070.41) and 370 address pairs related to NFT wash trading behaviors, causing a minimum loss of \$3,965,247.13. Furthermore, we provide insights from six aspects, i.e., marketplace design, profitability, NFT project design, payment token, user behavior, and NFT ecosystem.
Zhihao Hou, Jinji Yang, Ruilin Lai, Yale He · 6 authors
Smart contracts play a vital role in blockchain applications, supporting an expanding array of services as the number of blockchains rises. As service requirements become increasingly complex, the need for access and collaboration among multiple smart contracts becomes more prevalent. However, achieving access between smart contracts on different blockchains presents a significant challenge in the Internet of Blockchain scenario comprising numerous heterogeneous blockchains. In this paper, we first explore the problem of smart contract access in cross-heterogeneous blockchain scenarios. Then, an Oracle gateway-based cross-chain smart contract access architecture and a subscription-based cross-chain smart contract active access mechanism are proposed. Finally, a prototype is implemented to show that our architecture and mechanism can support cross-chain smart contract access for heterogeneous blockchains and reduce the complexity and latency of cross-chain smart contract access.
Wenze Xiong, Yetong Wang, Wanxin Li, Jie Zhang · 5 authors
The non-fungible tokens (NFTs) are unique cryptocurrencies that exist on a blockchain and cannot be replicated. However, today’s NFT market lacks a sensible pricing framework, which causes NFT price fluctuations to interfere with the investment market. The purpose of this research is to build the pricing mechanism for NFT, as it is directly related to the detailed traits of NFT. The rarity design serves as the driving force behind the proposed pricing mechanism. We present a prototype pricing and minting algorithm and implement it through a smart contract to assess both pricing accuracy and transaction performance. Our proposed mechanism employs specific parameters and data points related to NFT features, which could encompass floating-point values due to our integration of Ether within the regression formula. The experimental results showed that the rarity score of the features has a certain degree of impact on the NFT price.
Sidharth S Menon, N Aarthi
The deregulation of electricity market has paved way to new business models like peer to peer (P2P) trading. The renewable energy generators like Solar PV can sell the excess power and trading can be done dynamically. In this paper, a solution for energy trading is proposed based on blockchain technology and smart contracts. An algorithm is run on the Ethereum platform, which is linked to Ganache. The application was created in Solidity and tested on the EVM platform. The primary goal of this approach is to meet energy demand, making the energy market dynamic and decentralised. The transaction will be secure, and it also reduces the transaction cost and settlement times.
Inas Hasnaoui, Maria Zrikem, Rajaa Elassali
Bug bounty programs play a pivotal role for companies in identifying vulnerabilities within their digital products through collaborations with a global network of security researchers. In this paper, we introduce the bug bounty trilemma challenge—a concept that entails the delicate balance of security, privacy, and rewards within these programs. We then delve into “Bounty 3.0” as an innovative approach, harnessing the transformative potential of blockchain and Zero-Knowledge Proofs (ZKPs). Blockchain technology ensures un-paralleled transparency, decentralization, and immutability in bug reports and token-based bounties, while ZKPs establish a secure, anonymous, and confidential reporting process that safeguards privacy. This approach acts as a bridge, seamlessly connecting traditional bug bounty programs with block-chainWeb3 solutions, effectively addressing the bug bounty trilemma.
Umberto Natale, M. Moser
We present a comprehensive analysis of the implications of artificial latency in the Proposer-Builder Separation framework on the Ethereum network. Focusing on the MEV-Boost auction system, we analyze how strategic latency manipulation affects Maximum Extractable Value yields and network integrity. Our findings reveal both increased profitability for node operators and significant systemic challenges, including heightened network inefficiencies and centralization risks. We empirically validates these insights with a pilot that Chorus One has been operating on Ethereum mainnet. We demonstrate the nuanced effects of latency on bid selection and validator dynamics. Ultimately, this research underscores the need for balanced strategies that optimize Maximum Extractable Value capture while preserving the Ethereum network's decentralization ethos.
Anastasia Tsareva, Yash Madhwal, Yury Yanovich
In this paper, we analyze the decentralization features of Central Bank Digital Currencies (CBDCs) and evaluate the limitations of Distributed Ledger Technology (DLT) benefits in this context. Our research explores the essential characteristics of consensus algorithms, including security, finality, and efficiency, for CBDCs and considers the trade-off between transaction throughput and decentralization. After examining various options, we conclude that Proof of Work (PoW) and Proof of Stake (PoS) are unsuitable for CBDCs. However, Proof of Authority (PoA), Delegated Proof of Stake (DPoS), and Notary Services are promising alternatives. Our findings reveal that while CBDCs possess some decentralization components in their architecture, they still maintain political and logical centralization due to regulation by the Central Bank. Consequently, CBDCs can only partially leverage all the benefits of DLT, such as the ability to withstand challenges, which still depend on the Central Bank as the sole point of failure. This paper aims to equip policymakers with valuable insights to make informed decisions regarding the design of CBDC consensus algorithms.
Ryosuke Abe, Seiyo Kurita, Mariko Kobayashi, Shigeya Suzuki
In this paper, to estimate the risk of economic loss incurred by both parties in production order transactions, we propose a scheme that enables escrow and confirmation of the results without relying on a third party. In such transactions, both parties risk incurring economic losses if the other party behaves dishonestly. Generally, the risk can be reduced with an escrow service provided by a trusted third party. However, there is a risk of fraud by the third party; in some cases, the third party may not be available for the buyer or seller. Several existing schemes utilize fair exchange and blockchain to disburse the deposited payment upon the delivery of specific data. However, in production order transactions, some cases cannot be handled only by completion of delivery, such as disputes that arise when the data does not meet the quality expected by the buyer. In such cases, before the transaction starts, a party would confirm the counterparty’s behavior in past transactions to estimate the risk of a dispute occurring. In this paper, we propose a scheme that records the history of past transaction processes while utilizing blockchain-based escrow and allows future counterparties to confirm the history as a reference for estimating risk. By the opportunity loss that a history of dishonest behavior causes and applying blockchain-based escrow, the scheme motivates sellers and buyers to behave in good faith. We implemented a prototype system on top of Ethereum and verified its feasibility. By expanding the scope of transactions, we expect that it will be possible to determine whether transactions between individuals over the Internet are feasible without relying on a specific escrow service.