Blockchain Papers

Joshua R. Hendrickson

No abstract is available for this record.

Maximilian Gill

No abstract is available for this record.

Atis Elsts, Krešimir Klas

Concentrated liquidity (CL) provisioning is a way how to improve the capital efficiency of Automated Market Makers (AMM). Allowing liquidity providers to use leverage is a step towards even higher capital efficiency. A number of Decentralized Finance (DeFi) protocols implement this technique in conjunction with overcollateralized lending. However, the properties of leveraged CL positions have not been formalized and are poorly understood in practice. This article describes the principles of a leveraged CL provisioning protocol, formally models the notions of margin level, assets, and debt, and proves that within this model, leveraged LP positions possess several properties that make them safe to use.

Samuele Bibi

Over recent decades, especially since the 2007–08 global financial crisis, the world has experienced a rapid shift toward the adoption of digital payment methods. This trend has been driven by the rise of cryptocurrencies and introduction of central bank digital currencies (CBDCs), which are accelerating the move to a cashless society. This article explores the socio-cultural and geopolitical values of cash, often overlooked in the transition to digital currencies such as bitcoin and CBDCs. Using a historical lens, we analyze the role of cash in shaping culture, history, and geopolitics and propose policy measures to integrate these values into the design of digital currencies.

David Krause

No abstract is available for this record.

Bin Liu, Tina Prodromou, Sandy Suardi, Caihong Xu

No abstract is available for this record.

David Krause

No abstract is available for this record.

Busayo Omopariola

The transition toward a decentralized energy infrastructure in the United States is critical to addressing growing concerns over grid instability, energy security, and sustainability. Traditional centralized grids face increasing vulnerabilities due to aging infrastructure, climate-induced disruptions, and rising electricity demand. Decentralized energy systems, including distributed renewable energy sources, microgrids, and energy storage solutions, offer resilience and flexibility but require substantial investment. Public-private partnerships (PPPs) have emerged as a viable mechanism to bridge financing gaps by leveraging governmental support, private sector expertise, and innovative financing models. Digital financial instruments, such as blockchain-based energy trading platforms, green bonds, and tokenized energy assets, are reshaping investment strategies by enhancing transparency, liquidity, and accessibility in the energy market. The integration of decentralized finance (DeFi) in energy investment enables peer-to-peer transactions, reducing reliance on traditional financial intermediaries and fostering community-driven energy projects. Moreover, regulatory frameworks and policy incentives play a crucial role in incentivizing private sector participation and ensuring the scalability of decentralized energy initiatives. This paper examines how the synergy between PPPs and digital financial instruments can drive investment in decentralized energy projects, addressing grid instability challenges in the U.S. By analyzing case studies of successful implementations, policy recommendations, and emerging trends in energy finance, this study highlights the transformative potential of innovative investment models in accelerating the clean energy transition. The findings underscore the necessity of a collaborative, technology-driven approach to secure a resilient, decentralized energy future.

Napoleão Póvoa Ribeiro Filho, Vinícius Monteiro Galvão Da Silva

Criptomoedas são moedas digitais, que não existem na forma física, não são reguladas por nenhum tipo de órgão governamental e fornecem um certo tipo de anonimato para quem realiza uma transação. Tais moedas surgiram após diversos estudos e experimentos onde o objetivo era obter uma maior segurança e rapidez ao realizar transações por meios digitais. Hoje, essa tecnologia apresenta crescente aceitação em transações comerciais nos mais variados tipos de negócios. Porém, o seu entendimento ainda pode ser visto como um obstáculo para uma maior popularização da mesma. Este artigo tem por objetivo apresentar a origem as criptomoedas, explicar suas tecnologias e apresentar situações comerciais onde a mesma está sendo utilizada.

Jonas Groß

Many central banks worldwide are considering issuing a retail central bank digital currency due to the decreasing use of cash and the emergence of new forms of digital money. One of the main topics of debate is the level of transaction privacy. While technology allows for complete privacy or transparency, a high degree of privacy is necessary for a central bank digital currency for economic, regulatory, and socioeconomic reasons. The private sector has failed to provide a privacy-preserving payment solution. This chapter proposes a software-based central bank digital currency approach that uses zero-knowledge proofs to ensure complete transaction privacy while adhering to anti-money laundering regulations. Experts from central banks, corporations, associations, and academia have evaluated the approach and found it to be a feasible and promising solution for a privacy-preserving and compliant central bank digital currency.

Blessing Mbalaka

The speculative financial services sector and the systemic failures of financial globalisation have prompted a growing call for delinking from the hegemony of the US dollar. These systemic failures have been illustrated by financial mismanagement and the financial crisis of 2007-8. This event paints a dire picture of the consequences associated with poor regulation of the financial sector. This study seeks to interpret these events in terms of Gramsci’s Prison Notebooks and his concept of the ‘morbid symptoms of the interregnum’. According to Babic (2020), these occur when a hegemony and its institutions are ‘dying’, thereby hampering their power. This notion also highlights that the future remains murky, despite public calls for change. Gramsci calls this the ‘new that cannot be born’.This study seeks to extend this framework to the current state of the dollar hegemony. The ‘morbid symptoms’ we will examine include the call to delink from the speculative high-risk US economy, the emergence of cryptocurrencies, and the politics surrounding fiat money. Some have argued that the emergence of cryptocurrencies could be the ‘new’. However, this study argues that the negative characteristics associated with cryptocurrencies such as cybersecurity concerns and price volatility create ambiguity about whether cryptocurrency is the ideal trajectory. Therefore, it argues that ambiguity and calls for change qualify our current monetary situation to be classified as a Gramscian interregnum.It also examines the current fiat money discourse by highlighting how the dollar hegemony may be succeeded by another fiat currency. However, it argues that the inflationary shortfalls of fiat money make this a fallible option, thereby perpetuating the ambiguities within the Gramscian interregnum.

Eduardo Blasco, Carlos García de Enterría

Monetary systems comprise various layers of real and financial assets arranged hierarchically. Due to its properties, Bitcoin is a suitable asset to become the base money of a monetary system once its price has stabilized and people see it more like a medium of exchange than an investment. We review Bitcoin’s characteristics and explain their effect on its intra- and inter-temporal liquidity. We argue that Bitcoin will lower its bid-ask spread once users adopt financial assets convertible to Bitcoin. We propose the use of three financial assets working as Bitcoin derivatives to reduce Bitcoin’s demand shocks and lower its volatility: real bills, private scrip and cash notes. We explain when will this process take place and why people would have an incentive to rely on credit even under a Bitcoin standard.

Ricardo Ratner Rochman

O ecossistema decentralized finance vem se sofisticando, oferecendo oportunidades e desafiando instituições financeiras tradicionais e reguladoras.

Marcus Paulus De Oliveira Rosa, Lucas Caminha

Money is money, securities are securities, and banking is banking. Their fundamentals are not changed by whether technology rails are centralized (classic) or pseudo-decentralized (virtual assets) – the song remains the same. As such, this paper does not reinvent the wheel on why we should regulate cryptoasset centralized exchanges (CEXs), as there is enough bibliography from today to the XVII century to go around on that. Instead, we focus on how to regulate the CEXs, which comes into play in a world where their distributed ledger technology (DLT) rails are off-the-grid and hinder regulators from: (i) collecting market data (information asymmetry); and (ii) practical enforcement (technology/operational asymmetry). After revising current regulatory practices from various countries, we identify grounds for a practical approach – we propose that regulators might enforce full trading/financial intermediation obligations on the CEXs by enacting an indirect regulation/gatekeeper scheme, as inspired by the U.S. Foreign Account Tax Compliance Act (FATCA). In this model, regulators would restrict traditional institutions (i.e., banks, broker-dealers, clearings, funds) from transacting with CEXs which do not provide adequate evidence of material compliance with their trading/financial intermediation obligations. On a final remark, we narrate a growing movement which aims to insulate non-compliant crypto from the financial systems altogether, avoiding risks of contagion.

Authors unavailable

Decentralized finance (DeFi) was not well understood when it came into the spotlight in 2019. In 2020, it scaled fast and increased from $700 million at the beginning of 2020 to $15 billion by the end of 2020, and as of June 2022, the total value locked (TVL) reached a high of $256 billion. What explains this remarkable increase? The current financial system has left 1.7 billion people unbanked. The barriers to entry are high, the costs are high, transparency is low, and a small group of powerful elites dominates it. DeFi offers an accessible alternative to the current financial system. It explains its exponential borrowing, lending, yield farming, and insurance growth. Early results suggest that DeFi will redefine the financial system. This chapter provides an overview of DeFi, an analysis of its ecosystem, and its likely trajectory.

Samoil Malcheski, Jordan Gjorcev

This chapter deals with a topic that has been publicly debated in the North Macedonia in the last few years. The public utility companies are constantly in debt and with consistently poor quality of services. Hence, the main focus of the public debate is how to identify the causes of the persistent poor situation and how to overcome these problems facing the public utility systems. The primary aim of this chapter is to give an overview of the state in which public utility systems operate. Also, this chapter gives an overview of the importance of the institutional environment and decentralization and their impact on public utilities systems. At the end of the chapter, the sustainability of public utility companies and the financing of utility services and covering costs are presented.

Tully Rector, Jason Grant Allen

Abstract One of the perennial fault-lines in monetary theory is that between commodity and credit theories of money. The emergence of alternative payment systems based on blockchain and distributed ledger technologies, of which Bitcoin is the most prominent example, has raised a host of important questions in relation to this debate. This article considers two. The first is ontological: Are Bitcoin and similar ‘cryptocurrencies’ best conceived of as money? The second is political: Do these money candidates represent an emancipatory development over state-backed fiat currency? The ontological question, we will argue, invites the political one. If it is the case, as Chartalists maintain, that (i) for some X to be money it must have certain properties which can only be imparted by political authority (broadly understood) and if (ii) political authority ought to be subject to public control, then attempts by private actors to usurp a social ‘money function’ cannot count as legitimate political developments. We will argue in support of this position. This discussion is limited to Bitcoin, though its implications generalize for relevantly similar cryptocurrencies. Our method involves considering, first, claims made by Bitcoin’s defenders about its status as money, and what accounts for that status. While these claims are often thought to extend Mengerite or generally Austrian lines of economic argument, they resonate more with Marx’s theory of monetary value. Moreover, a close assessment of that theory’s defects yields specific normative conclusions that potentially undermine the notion that Bitcoin constitutes a valid means of resisting state monetary authority.

Nicholas Trebat

The world financial crisis of the late 2000s was for some the dawn of a new era in which state currency monopolies would be replaced by privately-issued digital currencies following strict rules of supply growth. Rather than trust big government and big banks with our money, cryptocurrencies would allow us to “trust the code” and the “mathematical structure” of blockchain technologies.In Brazil, as elsewhere, this neoliberal techno-utopia has not arisen. Though their use as speculative assets has increased, cryptocurrencies have not become a popular means of payment. The use of electronic money, on the other hand, issued by novel corporate entities called payment institutions, is now commonplace. Unlike cryptocurrencies, digital banking and electronic money in Brazil rest on a solid legal and institutional framework designed to incorporate them into the payments system. Digital banks enjoy most of the privileges bestowed upon traditional banks, making it possible for customers to use digital accounts in the same manner as a traditional checking account. In short, digital banks have become privileged members of Brazil’s state-led “pay community” and this is why they have flourished. Even in the digital era, money is a creature of the state.

Samuele Bibi

This paper investigates the evolution of cryptocurrencies. By nature and essence, Bitcoin challenged and implicitly threatened central bank money and its role in the monetary system. Meanwhile, central banks have been studying cryptocurrencies and launched pilot projects on their own digital currency, the Central Bank Digital Currency. Until recently, most economists considered Bitcoin merely as a speculative asset; however, the El Salvador decision in 2021 to establish it as a legal tender (through the Bitcoin Law) questions the status quo perception of Bitcoin. Given El Salvador’s legal obligation by law of their acceptance, allowing tax payments to the government and debts to be settled using Bitcoin, the Bitcoin Law challenges the boundaries of money. In light of the El Salvador experience, we consider different perspectives on the nature of money, allowing us to reject or include Bitcoin inside the money spectrum.

Carlos Alberto Durigan, Fernando José Barbin Laurindo

Cryptocurrency can be understood as a digital asset transacted among participants in the crypto economy. Every cryptocurrency must have an associated Blockchain. Blockchain is a Distributed Ledger Technology (DLT) which supports cryptocurrencies, this may be considered as the most promising disruptive technology in the industry 4.0 context. Decentralized finance (DeFi) is a Blockchain-based financial infrastructure, the term generally refers to an open, permissionless, and highly interoperable protocol stack built on public smart contract platforms, such as the Ethereum Blockchain. It replicates existing financial services in a more open and transparent way. DeFi does not rely on intermediaries and centralized institutions. Instead, it is based on open protocols and decentralized applications (Dapps). Considering that there are many digital coins, stablecoins and central bank digital currencies (CBDCs), these currencies should interact among each other sometime. For this interaction the Information Technology elements play an important whole as enablers and IT strategic alignment. This paper considers the strategic alignment model proposed by Henderson and Venkatraman (1993) and Luftman (1996). This paper seeks to answer two main questions 1) What are the common IT elements in the DeFi? And 2) How the elements connect to the IT strategic alignment in DeFi? Through a Systematic Literature Review (SLR). Results point out that there are many IT elements already mentioned by literature, however there is a lack in the literature about the connection between IT elements and IT strategic alignment in a Decentralized Finance (DeFi) architectural network. After final considerations, limitations and future research agenda are presented. Keywords: IT Strategic alignment, Decentralized Finance (DeFi), Cryptocurrency, Digital Economy.

João Vitor Monteiro Chagas, Karolyna Shayna Rodrigues de Lima, Heriberto Wagner Amanajás Pena, Educélio Gaspar Lisbôa · 5 authors

O presente trabalho tem o objetivo de analisar a estrutura de mercado da criptomoeda Bitcoin no cenário internacional através de um estudo da taxa de concentração do volume transacionado da moeda entre países, com a aplicação do Índice de Herfindahl- Hirschman para classificar a mesma. A metodologia utilizada para a construção do trabalho foi histórica e estatística, visando compreender processos passados e utilizar manipulação estatística para aprofundar os conhecimentos sobre o assunto.

Martin Walker

No abstract is available for this record.

Unyong Pyo

We consider an economy endowed with two rival currencies: Dollar and Bitcoin, both of which inherently carry no value at all. While the Dollar is maintained by the U.S. Fed with target inflation, the supply in Bitcoin tapers to zero over time. We present a model with underlying pricing equations that a submartingale prevails on Bitcoin prices. Hence, Bitcoin prices appreciate over time. Absence of mutual impatience in Dollars leads to Bitcoin speculation. The main source of Bitcoin appreciation comes from the high inflation in Dollar over that in Bitcoin. We also show Bitcoin speculation and equilibrium to Bitcoin persistence over competing with Dollars.

Henri Kouam

No abstract is available for this record.