There are four topics in the research area of decentralized finance (Defi). Innovative ideas were extensively reviewed, studied and built into four separate protocols: Degis is a decentralized insurance platform; Multiswap is a decentralized exchange; Prestare is a decentralized lending and borrowing protocol; and Ovisor is a decentralized investment aggregator.
The core of Degis is the innovative pricing model that is tailored to the nature of decentralization of insurance, which is quite a new area in decentralized finance. With innovative insurance products, Degis is attractive to both on-chain and off-chain clients. The buyers can hedge their risk through insurance products while seller can earn attractive yield. Other prominent features of the protocol are lucky box, liquidity mining and DAO, etc. These designs make Degis one of the best decentralized insurance services (www.degis.io).
The holy grail of decentralized finance is the under-collateralization in lending and borrowing. DeFi lending and borrowing protocols today make up about 20 percent of the total DeFi market measured by market capitalization. However, over-collateralization accepted as the norm is a bane for the DeFi world. It is one of the top-most shortcomings of the decentralized finance world. Prestare raises a solution to this problem. Credit score representing the unclaimed interest user has made on Prestare platform is introduced to measure users’ “credit”. Users will receive Credit Tokens(CRT) and the number of that is half of his or her credit score. One can use CRT to lower collateral in his/her future borrowing. Credit Scores are recorded individually while Credit Tokens are transferable and tradable. This design successfully solved the long-standing problem of under-collateralization.
In May of 2021, Uniswap V3 introduced a revolutionary protocol of swap that has range order with highly concentrated liquidity. Within a few months, the transaction volumes of Uniswap V3 reached nearly 20% of all decentralized exchanges. However, it was found that more than half of the liquidity providers actually lost money due to the impermanent loss. Through extensive analysis, we find that the main cause is the fixed fee rate for each pool. Multiswap is a new AMM protocol designed to tackle this problem by allowing flexible fee rate for liquidity providers within one pool. Backed up by theoretical results, the merits of Multiswap are also supported by extensive numerical simulations and real data analysis.
The Defi industry has been growing rapidly in recent years. Meanwhile, cryptocurrency investors are overwhelmed with countless investment options: yield farming, NFTs, spot trading, insurance, lending, etc. Ovisor is created to be the crypto-game-changer and the all-in-one investment aggregator, using data analytics and advanced algorithms. Eventually, Ovisor will make Defi easy for every player and build a robust investment DAO community for people aiming to accumulate wealth with Defi. Ovisor’s goal is to break down investment barriers and help retail investors overcome the obstacles they face when engaging in cryptocurrency investing. To achieve this goal, Ovisor uses advanced analytics and algorithms to track market data and build portfolios and indices for investors to choose from. This can significantly save investors’ efforts and time. Ovisor also analyzes users’ historical data to assess their investment preferences and recommends portfolios accordingly. The main structure of Ovisor be seen in the following figure.
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- Professor, Department of Mathematics
- Professor, Department of Industrial Engineering and Decision Analytics
- Program Director of MSc in Financial Mathematics
- Co-Director of Risk Management and Business Intelligence Program
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