This Week in Blockchain Research Issue #121
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Paper of the Week:
Paper Title: On the Economic Design of Stablecoins.
Stablecoins are cryptocurrencies designed to trade at par with a reference asset, typically the U.S. Dollar.
While they all share the same fundamental objective of maintaining stability against their reference assets, stablecoins differ substantially in terms of their economic design, quality of backing, stability assumptions and legal protections for coin holders.
This work surfaces two critical dimensions that underpin the economic design of every stablecoin: (1) the volatility of the reserve assets against the reference asset, which defines the risk profile of the stablecoin for coin holders; and (2) the degree to which the stablecoin is exposed to the risk of a death spiral.
To address these risks, fiat-backed stablecoins must rely on reserves of high-quality, liquid assets and be subject to a framework that protects coin holders from credit risk, market risk, operational risk, as well as the insolvency or bankruptcy of the issuer.
Although decentralized stablecoin designs eliminate the need to trust an intermediary, they are either exposed to death spirals, or highly capital inefficient, as they must be highly over-collateralized to account for the lack of an intermediary.
While these trade-offs might be acceptable for narrow use cases within the cryptocurrency space, without a breakthrough in decentralized stablecoin design, they are likely to limit the usefulness of these coins for mainstream adoption.
Authors: Christian Catalini*† and Alonso de Gortari‡,
Affiliations: * Diem Association, † MIT, and ‡ Novi Financial, Inc.
1. Paper Title: Zero-Knowledge Middleboxes.
Summary: This work introduces a modular pipeline for expressing a ZKMB circuit, and applies it to three case studies: firewalling non-HTTPS traffic, blocklisting domains for encrypted DNS, and allowlisting resolvers for oblivious DNS.
Authors: Paul Grubbs*, Arasu Arun*, Ye Zhang*, Joseph Bonneau*, and Michael Walfish*,
Affiliations: * NYU.
1. Paper Title: Sharding-Based Proof-of-Stake Blockchain Protocols: Security Analysis.
Summary: This article addresses the security of sharding-based blockchain protocols that are based on PoS and pBFT con- sensuses.
Authors: Abdelatif Hafid*, Abdelhakim Senhaji Hafid†, and Adil Senhaji*,
Affiliations: * University of Montreal and † Mizuho Securities.
1. Paper Title: Property rights in the Crypto age: NFTs and the auctioning of limited edition artwork.
Summary: This paper examines limited-edition auctions for the sale of digital artwork using NFTs.
Authors: Peyman Khezr* and Vijay Mohan*,
Affiliations: * Royal Melbourne Institute of Technology.
ACM Advances in Financial Technologies (AFT 2021). Call for Papers
Cryptocurrencies and Blockchain Technology (CBT 2021). Call for Papers
Financial Cryptography and Data Security 2022 (FC 2022).Call for Papers
Bitcoin Security Postdoctoral Associate - DCI - MIT Media Lab.
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