Bibliography on Decentralized Finance (DeFi)

Bibliography on Decentralized Finance (DeFi) === ###### tags: `bibliography` # Papers * [SoK: Decentralized Finance \(DeFi\)](https://arxiv.org/abs/2101.08778) * Delineate the DeFi ecosystem along its principal axes * Overview of DeFi primitives * Classify DeFi protocols * Technical and economic security of DeFi protocols * Open research challenges in DeFi ecosystem --- * [DeFi-ning DeFi: Challenges & Pathway](https://arxiv.org/abs/2101.05589) * Defining DeFi and its potential * Advantages of DeFi and overview of financial services on DeFi * Economics, governance and challenges of DeFi --- * [Flash Boys 2.0: Frontrunning in Decentralized Exchanges, Miner Extractable Value, and Consensus Instability](https://arxiv.org/abs/1904.05234) * Document and quantify arbitragers bots in blockchain systems, especifically in DEXes (Decentralized Exchanges) * Bots competition in PGA (Priority Gas Auction) * Define MEV (Miner Extractable Value) * Analyze bots competition using game theory and find a nash equilibreum for the game * Pbulished [here](https://ieeexplore.ieee.org/abstract/document/9152675) --- * [Quantifying Blockchain Extractable Value: How dark is the forest?](https://arxiv.org/pdf/2101.05511) * Quantify how much values sourced from blockchain extractable value (BEV) * Find private mining without broadcasting! --- * [High-Frequency Trading on Decentralized On-Chain Exchanges](https://arxiv.org/abs/2009.14021) * Modeling the sandwich attack on AMM DEXes * Their new paper: [On the Just-In-Time Discovery of Profit-Generating Transactions in DeFi Protocols](https://arxiv.org/abs/2103.02228) * [Attacking the DeFi Ecosystem with Flash Loans for Fun and Profit](https://arxiv.org/abs/2003.03810) * It talks about how using flash loans (loans that should repay in a single transaction) in DeFi may cause simplifying and boosting attacks. * [SoK: Decentralized Exchanges (DEX) with Automated Market Maker (AMM) protocols](https://arxiv.org/abs/2103.12732) * Establish a general AMM framework and comparing top AMM protocols and discuss security and privacy concerns associated with them. * [DeFiRanger: Detecting Price Manipulation Attacks on DeFi Applications](https://arxiv.org/abs/2104.15068) --- * [CeFi vs. DeFi -- Comparing Centralized to Decentralized Finance](https://arxiv.org/abs/2106.08157) * Analyze the differences between CeFi and DeFi * Covering differences in legal, economic, security, privacy and market manipulation * Exploring possible synergies between CeFi and DeFi # New Searched Papers * [Agent-Based Modelling of Blockchain Decentralized Financial Protocols](https://ieeexplore.ieee.org/abstract/document/9435601) * [May 2021- FRUCT](https://ieeexplore.ieee.org/xpl/conhome/9435428/proceeding) * Agent-based modeling approach for decentralized exchanges * Investigate the impact of front runners on the distribution of profits * Compare two exchange market (Uniswap and Liquifi) * [We might walk together, but I run faster: Network Fairness and Scalability in Blockchains](https://arxiv.org/abs/2102.04326) * [AAMAS-2021](http://www.ifaamas.org/Proceedings/aamas2021/forms/contents.htm) * Introduce two measures of network fairness, the probability of frontrunning and, the publishing fairness. * show that as we scale the blockchain, both these measures deteriorate, implying that the slower nodes face a disadvantage at higher throughputs * fairness and scalability in blockchain systems do not go hand in hand * [Maximizing Extractable Value from Automated Market Makers](https://arxiv.org/abs/2106.01870) * June 2021 * Formally characterize rational miners as players which follow an optimal strategy in the mining game * Identify relevant variants of the game * Devise effective procedures to construct solutions to mining game * [Blockchain Vulnerabilities in Practice](https://dl.acm.org/doi/abs/10.1145/3407230) * ACM - Digital Threats: Research and Practice - March 2021 * describes some vulnerabilities observed in smart contracts and node software, their exploitation, and how to avoid them, with a focus on the Ethereum ecosystem * [SoK: Transparent Dishonesty: Front-Running Attacks on Blockchain](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3369236) * Financial Cryptography and Data Security 2019 * body of knowledge and instances of front-running across the top 25 most active decentral applications (DApps) deployed on Ethereum blockchain * map the proposed solutions to front-running into useful categories * [Frontrunner Jones and the Raiders of the Dark Forest: An Empirical Study of Frontrunning on the Ethereum Blockchain](https://arxiv.org/abs/2102.03347) * June 2021 * present a methodology to efficiently measure the three types of frontrunning: displacement, insertion, and suppression * perform a large-scale analysis on more than 11M blocks and identify almost 200K attacks with an accumulated profit of 18.41M USD for the attackers, providing evidence that frontrunning is both, lucrative and a prevalent issue * [FairMM: A Fast and Frontrunning-Resistant Crypto Market-Maker](https://eprint.iacr.org/2021/609.pdf) * May 2021 - [Cryptology ePrint Archive: Report 2021/609](https://eprint.iacr.org/2021/609) * proposes a market-maker-based exchange which is resilient against a wide class of front-running * Implemented their exchange in Ethereum and showcase its competitive throughput, its performance under attack, and the associate gas costs. * [Exclusive Mining of blockchain transactions](https://monami.hs-mittweida.de/frontdoor/index/index/docId/11870) * BRL Working Paper Series No. 13 - Sep 2020 * identify three possible motivations for engaging in exclusive mining * outline why exclusive mining is difficult to prevent and introduce metrics which can be used to identify mining pools engaging in exclusive mining activity. * [(In)Stability for the Blockchain: Deleveraging Spirals and Stablecoin Attacks](https://arxiv.org/abs/1906.02152) * V3: March 2021 * suggest design improvements that aim to improve long-term stability * introduce new attacks that exploit arbitrage-like opportunities around stablecoin liquidations * [The Conceptual Flaws of Constant Product Automated Market Making](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3805750) * August 2021 * present an alternative pricing rule, based on insights from the market microstructure literature, that does not suffer from these flaws. * [A2MM: Mitigating Frontrunning, Transaction Reordering and Consensus Instability in Decentralized Exchanges](https://arxiv.org/abs/2106.07371) * June 2021 * create a new AMM design, an Automated Arbitrage Market Maker, short A2MM DEX. * reduce overheads, costs and increase blockchain security * A2MM serves as a decentralized design for users to atomically collect MEV, mitigating the dangers of centralized MEV relay services. * strengthens the blockchain consensus security by mitigating the competitive exploitation of MEV * reduces the network layer overhead of competitive transactions * reduces the predatory risks of sandwich attacks by taking advantage of the minimum profitable victim input. * offers financial benefits to traders * [Eden Network](https://edennetwork.io/EDEN_Network___Whitepaper___2021_07.pdf) * Whitepaper - August 2021 * a priority transaction network that protects traders from frontrunning, aligns incentives for block producers, and redistributes miner extractable value. * [A Note on Bundle Profit Maximization](https://web.stanford.edu/~guillean/papers/flashbots-mev.pdf) * a simple formulation of the bundle merging problem in Flashbots auction as an integer linear programming problem, and provide some basic extensions. * [Analyzing and Preventing Sandwich Attacks in Ethereum](https://pub.tik.ee.ethz.ch/students/2021-FS/BA-2021-07.pdf) * ETHz Bachelor thesis - August 2021 * present a large-scale analysis of sandwich attacks * Splitting up frontrunnable trades can be a valid mitigation strategy * [Clockwork Finance: Automated Analysis of Economic Security in Smart Contracts](https://eprint.iacr.org/2021/1147) * September 2021 * Cornell university, IC3 group (writers of Flashboys 2.0 paper) and flashbots team * Propose a general purpose, formal verification framework for mechanized reasoning about the economic security properties of composed decentralized-finance (DeFi) smart contracts. * Can support: * Economic security analysis of contracts by developers * Analysis of DeFi trading risks by users * Optimization of arbitrage opportunities by bots or miners # Websites * [Flashbots](https://github.com/flashbots/pm/#mev-roast-recordings) * An R&D organization working on mitigating the negative externalities of current MEV extraction techniques and avoiding the existential risks MEV could cause to state-rich blockchains like Ethereum. * [Extracted MEV Over Time](https://explore.flashbots.net/) * [Shutter Network](https://shutter.ghost.io/) * Combating Frontrunning and Malicious MEV Using Threshold Cryptography * [MEV and Me!](https://research.paradigm.xyz/MEV) * Define MEV challenge and its consequences. * [Fair Sequencing Services: Enabling a Provably Fair DeFi Ecosystem](https://blog.chain.link/chainlink-fair-sequencing-services-enabling-a-provably-fair-defi-ecosystem/) * [**Ed Felten** articles on medium about MEV](https://medium.com/@EdFelten) * [MEV auctions considered harmful](https://medium.com/offchainlabs/mev-auctions-considered-harmful-fa72f61a40ea) * [Front-Running as a Service](https://medium.com/offchainlabs/front-running-as-a-service-334c929c945a) * Ed Felten is completely against the idea of auctioning MEV opportunities. * [MEV articles on ethresear.ch](https://ethresear.ch/tag/miner-extractable-value) * [MEV Articles on Coindesk](https://www.coindesk.com/tag/mev) * [Why Ethereum’s Miner Extractable Value Problem Is Way Worse Than You Think](https://www.coindesk.com/ethereum-mev-frontrunning-solutions)