IDEAS home Printed from https://ideas.repec.org/p/qed/wpaper/1509.html
   My bibliography  Save this paper

Understanding the DeFi Network Through the Lens of a Production-Network Model

Author

Listed:
  • Jonathan Chiu

    (Bank of Canada)

  • Thorsten V. Koeppl

    (Queen's University)

  • Hanna Yu

    (Bank of Canada)

  • Shengxing Zhang

    (Peking University HSBC Business School)

Abstract

Decentralized Finance (DeFi) is composed of a variety of heterogeneous sectors that are interconnected through an input-output network of its tokens. We use a panel data set to empricially document the evolution of the DeFi network across its different sectors. We then employ a standard, theoretical production-network model to measure the value added and service outputs of different DeFi sectors which is fundamentally different from the commonly used metric of Total Value Locked (TVL). Our calibrated model is then used to study DeFi token prices and to predict the equilibrium effects of increasing network interconnectedness.

Suggested Citation

  • Jonathan Chiu & Thorsten V. Koeppl & Hanna Yu & Shengxing Zhang, 2023. "Understanding the DeFi Network Through the Lens of a Production-Network Model," Working Paper 1509, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:1509
    as

    Download full text from publisher

    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/wpaper/qed_wp_1509.pdf
    File Function: First version 2023
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jonathan Chiu & Cyril Monnet, 2024. "Public and Private Money Creation for Distributed Ledgers: Stablecoins, Tokenized Deposits, or Central Bank Digital Currencies?," Staff Working Papers 24-35, Bank of Canada.
    2. Yichen Luo & Yebo Feng & Jiahua Xu & Paolo Tasca, 2024. "Piercing the Veil of TVL: DeFi Reappraised," Papers 2404.11745, arXiv.org, revised May 2024.

    More about this item

    Keywords

    Blockchain; Crypto; Decentralized Finance; Production Network;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qed:wpaper:1509. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Babcock (email available below). General contact details of provider: https://edirc.repec.org/data/qedquca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.