DeFi and the Future of Finance
Описание книги
During the Global Financial Crisis in 2008, our financial infrastructure failed. Governments bailed out the very institutions that let the economy down. This episode spurred a serious rethink of our financial system. Does it make any sense that it takes two days to settle a stock transaction? Why do retailers, operating on razor thin margins, have to pay 3% for every customer credit card swipe? Why does it take two days to transfer money from a bank account to a brokerage—or any other company? Why are savings rates miniscule or negative? Why is it so difficult for entrepreneurs to get financing at traditional banks? In DeFi and the Future of Finance , Campbell R. Harvey, Ashwin Ramachandran and Joey Santoro, introduce the new world of Decentralized Finance. The book argues that the current financial landscape is ripe for disruption and we are seeing, in real time, the reinvention of finance. The authors provide the reader with a clear assessment of the problems with the current financial system and how DeFi solves many of these problems. The essence of DeFi is that we interact with peers—there is no brick and mortar and all of the associated costs. Savings and lending are reinvented. Trading takes place with algorithms far removed from traditional brokerages. The book conducts a deep dive on some of the most innovative protocols such as Uniswap and Compound. Many of the companies featured in the book you might not have heard of—however, you will in the future. As with any new technology, there are a myriad of risks and the authors carefully catalogue these risks and assess which ones can be successfully mitigated. Ideally suited for people working in any part of the finance industry as well as financial policy makers, DeFi and the Future of Finance gives readers a vision of the future. The world of finance will fundamentally be changed over the coming decade. The book enables you to become part of the disruption – not the target of the disruption.
Оглавление
Campbell R. Harvey. DeFi and the Future of Finance
Table of Contents
List of Tables
List of Illustrations
Guide
Pages
DeFi and the FUTURE of FINANCE
FOREWORD
PREFACE
I INTRODUCTION
FIVE KEY PROBLEMS OF CENTRALIZED FINANCIAL SYSTEMS
IMPLICATIONS
NOTES
II THE ORIGINS OF MODERN DECENTRALIZED FINANCE. A BRIEF HISTORY OF FINANCE
FINTECH
BITCOIN AND CRYPTOCURRENCY
ETHEREUM AND DeFi
NOTES
III DeFi INFRASTRUCTURE
BLOCKCHAIN
CRYPTOCURRENCY
THE SMART CONTRACT PLATFORM
ORACLES
STABLECOINS
DECENTRALIZED APPLICATIONS
NOTES
IV DeFi PRIMITIVES
TRANSACTIONS
FUNGIBLE TOKENS
Equity Token
Utility Tokens
Governance Tokens
NON-FUNGIBLE TOKENS
NFT Standard
Multitoken Standard
CUSTODY
SUPPLY ADJUSTMENT
Burn: Reduce Supply
Mint: Increase Supply
Bonding Curve: Pricing Supply
INCENTIVES
Staking Rewards
Slashing (Staking Penalties)
Direct Rewards and Keepers
Fees
SWAP
Order-Book Matching
Automated Market Makers
COLLATERALIZED LOANS
FLASH (UNCOLLATERALIZED) LOANS
NOTES
V PROBLEMS DeFi SOLVES
INEFFICIENCY
Keepers
Forking
LIMITED ACCESS
Yield Farming
Initial DeFi Offering
OPACITY
Smart Contracts
CENTRALIZED CONTROL
Decentralized Autonomous Organization
LACK OF INTEROPERABILITY
Tokenization
Networked Liquidity
VI DeFi DEEP DIVE
CREDIT/LENDING. MakerDAO
Compound
Aave
DECENTRALIZED EXCHANGE. Uniswap
DERIVATIVES. Yield Protocol
dYdX
Synthetix
TOKENIZATION
Set Protocol
Wrapped Bitcoin
NOTES
VII RISKS
SMART CONTRACT RISK
GOVERNANCE RISK
ORACLE RISK
SCALING RISK
DEX RISK
CUSTODIAL RISK
ENVIRONMENTAL RISK
REGULATORY RISK
NOTES
VIII CONCLUSIONS: LOSERS AND WINNERS
NOTE
ACKNOWLEDGMENT
REFERENCES
GLOSSARY
INDEX
WILEY END USER LICENSE AGREEMENT
Отрывок из книги
Campbell R. HarveyAshwin RamachandranJoey Santoro
Why? DeFi is a true “internet of money.” The internet showed the power of a universal, open network for information. In 40 years the idea of a similarly open, global network for value transfer will seem obvious, which makes this a truth hiding in plain sight today.
.....
The dozens of digital currency initiatives beginning in the early 1980s all failed.5 The landscape shifted, however, with the publication of the famous Satoshi Nakamoto Bitcoin white paper6 in 2008, which presents a peer-to-peer system that is decentralized and uses the concept of blockchain. Invented in 1991 by Haber and Stornetta,7 blockchain was initially primarily envisioned to be a time-stamping system to keep track of different versions of a document. The key innovation of Bitcoin was to combine the idea of blockchain (time stamping) with a consensus mechanism called proof of work (introduced by Back8 in 2002). The technology produced an immutable ledger that eliminated a key problem with any digital asset: you can make perfect copies and spend them multiple times. Blockchains allow for the important features desirable in a store of value, which were never before simultaneously present in a single asset. Blockchains allow for cryptographic scarcity (Bitcoin has a fixed supply cap of 21 million), censorship resistance and user sovereignty (no entity other than the user can determine how to use funds), and portability (can send any quantity anywhere for a low flat fee). These features combined in a single technology make cryptocurrency a powerful innovation.
The value proposition of Bitcoin is important and can be best understood juxtaposed with that of other financial assets. For example, consider the U.S. dollar (USD). It used to be backed by gold before the gold standard was abandoned in 1971. Now, the demand for USD comes from (a) taxes, (b) purchase of U.S. goods denominated in USD, and (c) repayment of debt denominated by USD. These three cases create value that is not intrinsic but rather is based on the network that is the U.S. economy. Expansion or contraction in these components can impact the price of the USD. Additionally, shocks to the supply of USD adjust its price at a given level of demand. The Fed can adjust the supply of USD through monetary policy in an attempt to achieve financial or political goals. Inflation eats away at the value of USD, decreasing its ability to store value over time. One might be concerned with runaway inflation – what Paul Tudor Jones calls the great monetary inflation – which would lead to a flight to inflation-resistant assets.9 Gold has proven to be a successful inflation hedge due to its practically limited supply, concrete utility, and general global trustworthiness. However, given that gold is a volatile asset, its historical hedging ability is realized only at extremely long horizons.10
.....
Добавить отзыв
Отзывы и комментарии читателей
Нет рецензий.
Будьте первым, кто напишет рецензию на книгу DeFi and the Future of Finance
Подняться наверх