Decentralized Finance: On Blockchain and Smart Contract-based Financial Markets

The term Decentralized Finance or DeFi refers to an alternative financial infrastructure built on top of the Ethereum Blockchain. DeFi uses smart contracts to create protocols that replicate existing financial services in a more open, interoperable, and transparent way. In this paper, we highlight opportunities and potential risks of the ecosystem. We propose a multi-layered framework to analyze the implicit architecture and the various DeFi building blocks, including token standards, decentralized exchanges, decentralized debt markets, Blockchain derivatives, and on-chain asset management protocols. We conclude that DeFi still is a niche market with certain risks but also has interesting properties in terms of efficiency, transparency, accessibility, and composability. As such, it may potentially contribute to a more robust and transparent financial infrastructure

Decentralized Exchanges: The Profitability Frontier of Constant Product Market Makers

In this paper we analyze constant product market makers (CPMMs). We formalize the liquidity providers' profitability conditions and introduce a concept we call the profitability frontier in the xyk-space. We study the effect of mint and burn fees on the profitability frontier, consider various pool types, and compile a large data set from all Uniswap V2 transactions. We use this data to further study our theoretical framework and the profitability conditions. We show how the profitability of liquidity provision is severely affected by the costs of mint and burn events relative to the portfolio size and the characteristics of the trading pair

Blockchain Forks: A Formal Classification Framework and Persistency Analysis

Blockchain forks can have severe economic implications, sow uncertainty and undermine trust. In this paper, we introduce a formal framework to study the emergence, persistency and economic consequences of blockchain forks. We argue that blockchain forks can be process- or protocol-based and emerge unintentionally or deliberately. We then proceed with a sub-classification of protocol-based forks and study the circumstances under which a chain split may become permanent. It can be shown that the persistency of a fork depends on the nature of the change to the consensus rules and on the relative allocation of the consensus-relevant resources. Lastly, we discuss business implications as well as potential consequences for policy makers and practitioners

Blockchain Vending Machine: A Smart Contract-Based Peer-to-Peer Marketplace for Physical Goods

In this paper, we propose an autonomous vending machine that is governed by a public Blockchain and smart contracts platform. Set up as a decentralized autonomous organization, it serves as an open marketplace for physical goods, where anyone can buy and/or sell objects. We propose a basic architecture for the machine, analyze pricing and fee mechanisms and examine potential pitfalls. Moreover, we discuss open issues, possible extensions and further areas for improvement. We conclude that the deployment of such machines could significantly improve our understanding of decentralized autonomous organizations and build a bridge between virtual and physical markets. Insights gained from such an experiment may raise important questions for further researc

Cash and Negative Interest Rates

Cash is accused of three sins: First, cash is inefficient and costly to use, and society would be better off without it. Second, it promotes crime, and facilitates money laundering and tax evasion. Third, it makes negative nominal interest rates infeasible. In certain situations, this may hinder central banks from implementing optimal monetary policies. In this article, we argue that all three accusations are fallacies; they are based on faulty reasoning. There is absolutely no need to limit the use of cash. On the contrary, societies should facilitate its use

Cash and Negative Interest Rates

Cash is accused of three sins: First, cash is inefficient and costly to use, and society would be better off without it. Second, it promotes crime, and facilitates money laundering and tax evasion. Third, it makes negative nominal interest rates infeasible. In certain situations, this may hinder central banks from implementing optimal monetary policies. In this article, we argue that all three accusations are fallacies; they are based on faulty reasoning. There is absolutely no need to limit the use of cash. On the contrary, societies should facilitate its use

Bitcoin und andere Kryptowährungen. Ein dezentrales Register

Aus der Forschung und Lehre: Die Bitcoin-Blockchain wird als Innovation des Jahrzehnts gehandelt, welche das Potenzial hat, die Welt nachhaltig zu veränder

Simple fecal flotation is a superior alternative to guadruple Kato Katz smear examination for the detection of hookworm eggs in human stool

Microscopy-based identification of eggs in stool offers simple, reliable and economical options for assessing the prevalence and intensity of hookworm infections, and for monitoring the success of helminth control programs. This study was conducted to evaluate and compare the diagnostic parameters of the Kato-Katz (KK) and simple sodium nitrate flotation technique (SNF) in terms of detection and quantification of hookworm eggs, with PCR as an additional reference test in stool, collected as part of a baseline cross-sectional study in Cambodia.; Fecal samples collected from 205 people in Dong village, Rovieng district, Preah Vihear province, Cambodia were subjected to KK, SNF and PCR for the detection (and in case of microscopy-based methods, quantification) of hookworm eggs in stool. The prevalence of hookworm detected using a combination of three techniques (gold standard) was 61.0%. PCR displayed a highest sensitivity for hookworm detection (92.0%) followed by SNF (44.0%) and quadruple KK smears (36.0%) compared to the gold standard. The overall eggs per gram feces from SNF tended to be higher than for quadruple KK and the SNF proved superior for detecting low egg burdens.; As a reference, PCR demonstrated the higher sensitivity compared to SNF and the quadruple KK method for detection of hookworm in human stool. For microscopic-based quantification, a single SNF proved superior to the quadruple KK for the detection of hookworm eggs in stool, in particular for low egg burdens. In addition, the SNF is cost-effective and easily accessible in resource poor countries