2024/2025
Decentralized Finance
Language:
English
ECTS credits:
3
Course Syllabus
Abstract
In general this course aims to: •Explain fundamental concepts underpinning decentralized finance (DeFi) such as blockchain, distributed ledgers, consensus mechanisms, smart contracts. •Give understanding of the ecosystem of decentralized financial applications and differentiate them from traditional financial systems. •Identify and compare major categories of DeFi including stablecoins, lending, borrowing, decentralized exchanges, derivatives, payments and more. •Analyze the economic incentives, governance mechanisms, risks and regulations associated with leading DeFi protocols. •Evaluate transparency, accessibility, efficiency, and other benefits afforded by decentralized finance. •Demonstrate limitations and challenges confronting the DeFi ecosystem related to scalability, interoperability, security, user experience. •Show application of DeFi platforms to execute basic financial transactions such as taking loans, making payments, trading derivatives. •Perform perspectives on the future evolution of decentralized finance and its potential disruption of mainstream financial industry.
Learning Objectives
- Explain fundamental concepts underpinning decentralized finance (DeFi) such as blockchain, distributed ledgers, consensus mechanisms, smart contract
- Give understanding of the ecosystem of decentralized financial applications and differentiate them from traditional financial systems
- Identify and compare major categories of DeFi including stablecoins, lending, borrowing, decentralized exchanges, derivatives, payments and more
- Analyze the economic incentives, governance mechanisms, risks and regulations associated with leading DeFi protocols
- Evaluate transparency, accessibility, efficiency, and other benefits afforded by decentralized finance
- Demonstrate limitations and challenges confronting the DeFi ecosystem related to scalability, interoperability, security, user experience
- Show application of DeFi platforms to execute basic financial transactions such as taking loans, making payments, trading derivatives.
- Perform perspectives on the future evolution of decentralized finance and its potential disruption of mainstream financial industry
Expected Learning Outcomes
- Define key concepts of decentralized finance such as stablecoins, exchanges, lending, insurance
- Classify major categories of DeFi and explain their purposes and mechanisms
- Analyze incentives, risks, regulations facing leading DeFi protocols like Compound, Aave, Uniswap
- Evaluate differences between centralized and decentralized financial systems.
- Explain how blockchain, smart contracts enable decentralization of finance.
- Discuss concepts like composability, liquidity pools, yield farming in DeFi
- Apply DeFi platforms and Dapps to conduct lending, exchange tokens, make payments.
- Scrutinize latest innovations like flash loans, prediction markets, NFTs in DeFi
- Forecast potential of DeFi to enhance financial access, efficiency, transparency.
- Identify challenges confronting DeFi ecosystem related to UX, regulations.
- Demonstrate concepts learnt through case studies and class projects on DeFi.
Course Contents
- Introduction to Decentralized Finance
- DeFi Building Blocks
- Decentralized Exchange Protocols
- Lending and Borrowing Platforms
- Derivatives and Asset Management
- Payments, Insurance and Other Innovations
Assessment Elements
- Evaluated TestsThese tests will assess conceptual knowledge on the risk measurement concepts learned during the course
- Final ExamA cumulative exam at the end of the course that will evaluate students on their holistic, integrated, and synthesized learning across all modules.
Bibliography
Recommended Core Bibliography
- Paweł Szewczyk. (2019). Application of Blockchain Technology in Supply Chain Management. Zeszyty Naukowe. Organizacja i Zarządzanie / Politechnika Śląska : Modernity of Industry and Sciences, 14, 591–600. https://doi.org/10.29119/1641-3466.2019.136.45
Recommended Additional Bibliography
- Yaga, D., Mell, P., Roby, N., & Scarfone, K. (2019). Blockchain Technology Overview. https://doi.org/10.6028/NIST.IR.8202
- Zilibotti, F., Van Reenen, J., Lelarge, C., Aghion, P., & Acemoglu, D. (2007). Technology, Information, and the Decentralization of the Firm. Scholarly Articles. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.p.hrv.faseco.4481506