Blockchain and Decentralized Finance – BLOCKFI

The concept of Decentralized Finance (DeFi) involves applications operating on blockchains, aiming to replicate traditional financial products. Despite being smaller in volume compared to Traditional Finance (TradFi), DeFi is gaining significance in the crypto landscape. DeFi addresses key issues of TradFi. In TradFi, assets are entrusted to intermediaries, leading to trust and counterparty risks. TradFi settlements are slow due to multiple intermediaries, while DeFi settles assets within seconds, operating 24/7. DeFi applications are interoperable, enabling seamless asset flow and offering properties like censorship resistance and transparency. DeFi is poised to underpin disintermediated finance, demanding extensive research.

This ANR proposal aims to develop mathematical and statistical models, and tools for risk monitoring of DeFi protocols, ground execution protocols on formal proofs, and enhance next-gen protocols' efficiency and security.
Among the topics that will be investigated, let us mention systemic risks for stablecoins and lending-borrowing protocols, Automated Market Makers and the development of formal methods and suitable statistical models. The interdisciplinary team of mathematicians, statisticians, economists, and computer scientists is a strong asset for this project.