This book deals with the concept of Decentralized Lending on the Blockchain.In order to familiarize with the topic, the basic principles of the underlying technology, such as blockchain, smart contracts or the general architecture of Decentralized Finance, are highlighted. More specific points of Decentralized Lending, such as the principle of supplying and borrowing, lending pools and the underlying logic of overcollateralization will be presented in more detail subsequently. Furthermore, the principle of liquidation is explained, with a focus on the underlying reasons for this. The aim is to provide an overview of how Decentralized Loans work and how the interest rates for them are composed. In addition, the empirical part addresses the question of the extent to which price fluctuations of the deposited collateral have an influence on its liquidation.
Author(s): Matthias Schaible
Series: BestMasters
Publisher: Springer Gabler
Year: 2022
Language: English
Pages: 63
City: Wiesbaden
Preface
Abstract
Contents
Abbreviations
List of Figures
List of Tables
1 Introduction
1.1 Background and Relevance of the Topic
1.2 Objective
1.3 Methodology
1.4 Structure of the Thesis
2 Lending on the Blockchain
2.1 Basic Principles
2.1.1 Blockchain
2.1.2 Smart Contracts
2.1.3 DeFi Architecture
2.2 Supplying and Borrowing in Decentralized Lending
2.3 Applications
2.3.1 Simple Lending
2.3.2 Arbitrage
2.3.3 Leveraging
2.4 Interest Rate Models
2.4.1 Linear Rates Model
2.4.2 Non-linear Rates Model
2.4.3 Kinked Rates Model
2.4.4 Stable Rates Model
2.5 Influence of the Utilization Rate on the Interest Rate
3 Liquidations
3.1 Literature Review
3.2 Empirical Evidence and Method
3.3 Data Description
3.4 Analysis
4 Conclusion
Literature
