Andreas Park
What is a blockchain?
What is a cryptocurrency?
What is Decentralized Finance?
decentralized finance =
provision of financial services without the necessary involvement of a traditional financial intermediary
in practice: new financial infrastructure that will be a common resource
payments
stocks, bonds, and options
swaps, CDS, MBS, CDOs
insurance contracts
\(\vdots\)
borrowing and lending rates compounded per block
Smart Contract Derivatives with Synthetix
How does it work?
Securities Creation: Tokensets
idea: create new mutual fund like asset
DeFi: an emerging ecosystem
Source: Harvey, Ramachandran, and Santoro (2020)
Does it matter economically?
Risks and open problems
Blockchain tokens:
What type of tokens exist?
Tokens by use
payments:
utility
stablecoins
governance
asset
derivatives
Disclaimer: this list in non-exhaustive, new ideas and concepts come up every day!
What's special about tokens?
What's the role of the regulator?
UniSwap Lab supports development
a website app accesses the code
token holders control contact features
don't own the code
operation = decentral
control = decentral
anyone can use the baseline code
core code runs on the blockchain
A glut of regulators
Scams and frauds: Anybody can create a token
total gain: 230,000%
Crypto Wash Trading, Lin William Cong, Xi Li, Ke Tang, Yang Yang
Manipulation
Volume on centralized exchanges
Price Manipulation on centralized exchanges
Cryptocurrency Pump-and-Dump Schemes by Li, Shin, Wang 2020
Is Bitcoin really un-tethered by Griffin and Shams JF 2020
August 2016
Centralized exchanges are a security risk
Upcoming regulatory action
What lies ahead?
Evolution
= amalgamation of the digital and physical world ("phygital")
The bigger picture: Web3 & the "Metaverse"
CBDCs are on their way
Source: CBDCTracker.org
Will the Bank of Canada get us a Digital Loonie?
The Bank of Canada's Contingency Plan (Feb 2020):
Consider Issuing CBDL if:
Should they?
Yes: Veneris, Park, Long, Puri (2021)
Can they?
What's Next?
CBDCs
@financeUTM
andreas.park@rotman.utoronto.ca
slides.com/ap248
sites.google.com/site/parkandreas/
youtube.com/user/andreaspark2812/