Grasping decentralized finance through the lens of economic theory

【Author】 Chiu, Jonathan; Kahn, Charles M.; Koeppl, Thorsten, V

【Source】CANADIAN JOURNAL OF ECONOMICS-REVUE CANADIENNE D ECONOMIQUE

【影响因子】1.301

【Abstract】In this viewpoint article, we provide an analysis of the value proposition of decentralized finance (DeFi) and its limitations using a simple stylized model of collateralized lending. DeFi uses a decentralized ledger to run smart contracts that automatically enforce the terms of a lending contract and safeguard the collateral. DeFi can lower the costs associated with intermediated lending and improve financial inclusion. Limitations are the volatility of crypto collateral and stablecoins used for settlement, the possible incompleteness of smart contracts and the lack of a reliable oracle. A proper infrastructure reducing such limitations could improve the value of DeFi.

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【发表时间】

【收录时间】2022-11-17

【文献类型】观点阐述

【主题类别】

区块链应用-虚拟经济-DeFi