arXiv subjects

Charalampos Stasinakis

Publications and source records attributed to Charalampos Stasinakis.

4 recordsLinked to original sources

arXiv2023

Voter Coalitions and democracy in Decentralized Finance: Evidence from MakerDAO

Decentralized Autonomous Organization (DAO) provides a decentralized governance solution through blockchain, where decision-making process relies on on-chain voting and follows majority rule. This paper focuses on MakerDAO, and we find three voter coalitions after applying clustering algorithm to voting history. The emergence of a dominant voter coalition is a signal of governance centralization in DAO, and voter coalitions have complicated influence on Maker protocol, which is governed by MakerDAO. This paper presents empirical evidence of multicoalition democracy in DAO and further contributes to the contemporary debate on whether decentralized governance is possible.

cs.SI↗

arXiv2023

Liquidity Risks in Lending Protocols: Evidence from Aave Protocol

Lending Protocols (LPs), as blockchain-based lending systems, allow any agents to borrow and lend cryptocurrencies. However, liquidity risks could occur, especially when salient loans are initiated by a particular group of borrowers. This paper proposes measurements of liquidity risks, focusing on both available liquidity and market concentration in LPs. By using Aave as a case study, we find that liquidity risks are highly volatile and show complex effects on Aave, and liquidity in Aave may affect across on-chain lending market. Compared to new users, regular users that repeatedly borrow cryptocurrencies may negatively affect Aave protocol, implying that user loyalty is a double-edged sword for LPs.

q-fin.RM↗

arXiv2023

Decentralization illusion in Decentralized Finance: Evidence from tokenized voting in MakerDAO polls

Decentralized Autonomous Organization (DAO) is very popular in Decentralized Finance (DeFi) applications as it provides a decentralized governance solution through blockchain. We analyze the governance characteristics in the Maker protocol, its stablecoin DAI and governance token Maker (MKR). To achieve that, we establish several measurements of centralized governance. Our empirical analysis investigates the effect of centralized governance over a series of factors related to MKR and DAI, such as financial, transaction, network and twitter sentiment indicators. Our results show that governance centralization influences both the Maker protocol, and the distribution of voting power matters. The main implication of this study is that centralized governance in MakerDAO very much exists, while DeFi investors face a trade-off between decentralization and performance of a DeFi protocol. This further contributes to the contemporary debate on whether DeFi can be truly decentralized. centralized governance in MakerDAO very much exists, while DeFi investors face a trade-off between efficiency and decentralization. This further contributes to the contemporary debate on whether DeFi can be truly decentralized.

cs.CR↗

arXiv2019

Technical Analysis and Discrete False Discovery Rate: Evidence from MSCI Indices

We investigate the performance of dynamic portfolios constructed using more than 21,000 technical trading rules on 12 categorical and country-specific markets over the 2004-2015 study period, on rolling forward structures of different lengths. We also introduce a discrete false discovery rate (DFRD+/-) method for controlling data snooping bias. Compared to the existing methods, DFRD+/- is adaptive and more powerful, and accommodates for discrete p-values. The profitability, persistence and robustness of the technical rules are examined. Technical analysis still has short-term value in advanced, emerging and frontier markets. Financial stress, the economic environment and market development seem to affect the performance of trading rules. A cross-validation exercise highlights the importance of frequent rebalancing and the variability of profitability in trading with technical analysis.

q-fin.ST↗