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Illiquidity Risks in Lending Protocols (LPs) : Evidence from Aave Protocol

Sun, Xiaotong - 2021

Benefiting from blockchain, Decentralized Finance (DeFi) can replicate most financial activities in traditional financial markets. Among various DeFi, Lending Protocols (LPs) allow users to borrow and lend tokens, which resembles banks in DeFi. In this paper, we investigate illiquidity risks of...

Persistent link: https://www.econbiz.de/10013310590

Bankruptcy Codes and Risk Sharing of Currency Unions

Wang, Xuan - 2021

Since the Eurozone Crisis of 2010-12, a critical debate on the viability of a currency union has focused on the role of a fiscal union in adjusting for country heterogeneity. However, a fully-fledged fiscal union may not be politically feasible. This paper develops a two-country general...

Persistent link: https://www.econbiz.de/10013246925

Borrowing Base Revolvers : Liquidity for Risky Firms

Flannery, Mark J. - 2011

How do risky firms with low cash flow finance their liquidity needs? This paper investigates a relatively common, but …

Persistent link: https://www.econbiz.de/10013131436

UNISWAP : Impermanent Loss and Risk Profile of a Liquidity Provider

Aigner, Andreas A.; Dhaliwal, Gurvinder - 2021

function determined by the amount of currencies supplied by the liquidity providers. Liquidity providers can be regarded as … investors in the decentralized exchange and earn fixed commissions per trade. They lock up funds in liquidity pools for distinct … pairs of currencies allowing market participants to swap them using the fixed price function. Liquidity providers take on …

Persistent link: https://www.econbiz.de/10013220350

Are you a Lehman, brother? : interbank uncertainty in a DSGE model ; conference paper

Grimme, Christian; Siemsen, Thomas - 2014 - Preliminary draft, This version June 25, 2014

Did the increase in counterparty risk perception in the interbank market since autumn 2007 contribute to the severe contraction of the US economy? To address this question we introduce interbank market uncertainty in a DSGE model with frictional financial intermediation. Interbank uncertainty is...

Persistent link: https://www.econbiz.de/10010487259