Modeling and Analysis of Crypto-Backed Over-Collateralized Stable Derivatives in DeFi

arXiv:2402.18119v1 Announce Type: cross
Abstract: In decentralized finance (DeFi), stablecoins like DAI are designed to offer a stable value amidst the fluctuating nature of cryptocurrencies. We examine the class of crypto-backed stable derivatives, with a focus on mechanisms for price stabilization, which is exemplified by the well-known stablecoin DAI from MakerDAO. For simplicity, we focus on a single-collateral setting. We introduce a belief parameter to the simulation model of DAI in a previous work (DAISIM), reflecting market sentiments about the …

analysis arxiv class crypto cryptocurrencies cs.cr dai decentralized defi derivatives finance focus modeling nature offer q-fin.rm stablecoin stablecoins value well-known