Settlement on decentralized ledgers is transparent and batched. The settlement also allows settlement agents to expropriate profitable arbitrage trades. Arbitrage may be socially beneficial or wasteful. We model the effect of an alternate, private settlement on arbitrage. We document payments...

We analyze a unique data set of collateral liquidations on two Decentralized Finance lending platforms - Compound and Aave. Such liquidations require arbitrageurs to repay the loan in return for the discounted collateral. Using Blockchain transaction data, we observe if arbitrageurs liquidate...

We provide evidence that the settlement market in blockchain systems deviates from a perfectly competitive market. Examining the bitcoin blockchain, we document that 5.88% of transactions, which we label as private, bypass the competitive process and seem to be channelled directly to miners....

Liquidity providers (LPs) on decentralized exchanges pay a fixed transaction cost (gas price) whenever they update their positions. Different economies of scale across LPs lead in equilibrium to the fragmentation of liquidity supply between low- and high-fee pools. Using data on liquidity...

Undoubtedly inspired by recent advances in technology-driven payment systems such as mobile payment systems, cryptocurrencies, and blockchain technologies, recent years have seen central banks worldwide explore the possibility of issuing digital forms of fiat money called central bank digital...

Uniswap is one of the largest decentralized exchanges with a liquidity balance of over 3 billion USD and daily trading volume of over 700 million USD. It is designed as a system of smart contracts on the Ethereum blockchain, and is a new model of liquidity provision, so called automated market...

Bitcoin users can offer fees to miners who record their transactions in the block-chain. We document high variation of bitcoin fees, not only over time, but also within blocks. Further, the block-chain rarely runs at capacity, even though fees tend to be higher when blocks are fuller, so miners...

Between January 2016 and February 2018, Bitcoin were in Korea on average 4.73% more expensive than in the United States, a fact commonly referred to as the Kimchi premium. We argue that capital controls create frictions as well as amplify existing frictions from the microstructure of the Bitcoin...

Trade credit can serve as a strategic tool for a supplier to influence retailer behavior in the product market. The unique structure of trade credit, a period of free financing followed by a high interest rate increases the cost of rolling over unsold goods making retailers more aggressive when...