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On the fragility of DeFi lending / by Jonathan Chiu, Emre Ozdenoren, Kathy Yuan andShengxing Zhang.FB3-5/2023-14E-PDF

"We develop a dynamic model of decentralized finance (DeFi) lending that incorporates two/these key features: 1) borrowing and lending are decentralized, anonymous, overcollateralized and backed by the market value of crypto assets where contract terms are pre-specified and rigid; and 2) information friction exists between borrowers and lenders. We identify a price-liquidity feedback: the market outcome in any given period depends on agents’ expectations about lending activities in future periods, with higher price expectations leading to more lending and higher prices in that period"--Abstract.

Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.921953&sl=0

Publication information
Department/Agency
  • Bank of Canada, issuing body.
TitleOn the fragility of DeFi lending / by Jonathan Chiu, Emre Ozdenoren, Kathy Yuan andShengxing Zhang.
Series title
  • Staff working paper = Document de travail du personnel, 1701-9397 ; 2023-14
Publication typeMonograph - View Master Record
Language[English]
FormatDigital text
Electronic document
Note(s)
  • "Last updated: February 22, 2023."
  • Includes bibliographical references (pages 27-29).
  • Includes abstract in French.
Publishing information
  • [Ottawa] : Bank of Canada = Banque du Canada, 2023.
  • ©2023
Author / Contributor
  • Chiu, Jonathan, author.
Description1 online resource (40 pages) : charts.
Catalogue number
  • FB3-5/2023-14E-PDF
Subject terms
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