arXiv subjects

Kiarash Firouzi

Publications and source records attributed to Kiarash Firouzi.

7 recordsLinked to original sources

arXiv2026

Kladia Liquidity Deflator (KLD): A Debt-Indexed Deflationary Token on XRPL

Kladia Liquidity Deflator (KLD) is an XRPL-based, debt-indexed token whose supply dynamics respond directly to a debt index derived from macroeconomic data sources. The model links indebtedness to deterministic adjustments in issuance, burns, and escrow release caps, creating a rule-based deflationary mechanism that strengthens as debt rises. With a fixed maximum supply of 10 billion KLD, the mechanism is implemented through XRPL oracles and governance. Escrow locking depends on the TokenEscrow amendment; until it is active network-wide, allocations will be secured in a multi-signature vault with published rules and public monitoring. KLD provides a transparent and mathematically grounded framework for a macro-responsive digital asset.

q-fin.GN↗

arXiv2025

A Tokenized Sovereign Debt Conversion Mechanism for Dynamic Public Debt Reduction

In this paper, we present the Tokenized Sovereign Debt Conversion Mechanism (TSDCM), a smart-contracted instrument that, upon meeting both debt-to-GDP and GDP-growth thresholds, automates the retirement of sovereign debt. TSDCM initiates the conversion of a portion of outstanding bonds into performance-linked tokens by integrating a two-state regime-switching jump-diffusion framework into decentralized protocols. We prove finite-time activation and expected debt reduction through new propositions, establish the existence and uniqueness of the underlying stochastic processes, and introduce a main theorem that ensures a strict decline in expected debt levels. With significant tail-risk mitigation, calibration using IMF data and MATLAB Monte Carlo simulations shows a 20-25% decrease in expected debt-to-GDP ratios over a ten-year period. A transparent and incentive-aligned route to sustainable sovereign debt management is provided by TSDCM.

econ.TH↗

arXiv2025

Stochastic Dynamics of Ripple XRP for Cross-Border Settlement Optimization

The feasibility of XRP as a liquidity medium in cross-border transactions is assessed in this paper using a thorough stochastic framework. We use simulations of settlement latency, regime-switching volatility, and jump-diffusion models. The models are calibrated using historical data from public exchanges and RippleNet corridors, and they assess FX dynamics, liquidity depth, and tail risks in real-world scenarios. The behavior of XRP differs significantly from the conventional GBM assumptions, according to the results, and stochastic volatility with regime awareness provides a reliable path to corridor optimization. Our empirical validation shows that adding volatility feedback and routing adjustments significantly increases remittance success rates.

physics.soc-ph↗

arXiv2025

Quantifying Crypto Portfolio Risk: A Simulation-Based Framework Integrating Volatility, Hedging, Contagion, and Monte Carlo Modeling

Extreme volatility, nonlinear dependencies, and systemic fragility are characteristics of cryptocurrency markets. The assumptions of normality and centralized control in traditional financial risk models frequently cause them to miss these changes. Four components-volatility stress testing, stablecoin hedging, contagion modeling, and Monte Carlo simulation-are integrated into this paper's modular simulation framework for crypto portfolio risk analysis. Every module is based on mathematical finance theory, which includes stochastic price path generation, correlation-based contagion propagation, and mean-variance optimization. The robustness and practical relevance of the framework are demonstrated through empirical validation utilizing 2020-2024 USDT, ETH, and BTC data.

q-fin.RM↗

arXiv2024

Log-Ergodic Dynamics in Stochastic Monetary Velocity: Theoretical Insights and Economic Implications

We suggest employing log-ergodic processes to simulate the velocity of money in an ergodic manner. Our approach sheds light on economic behavior, policy implications, and financial dynamics by maintaining long-term stability. By bridging theory and practice, the partially ergodic model helps analysts and policymakers comprehend and forecast velocity of money. The empirical analysis, using historical U.S. GDP and money supply data, demonstrates the model's effectiveness in capturing the long-term stability of the velocity of money. Key findings indicate that the log-ergodic model offers superior predictive power compared to traditional models, making it a valuable tool for policymakers to control economic factors in vital situations.

q-fin.GN↗

arXiv2024

Some Applications of Log-Ergodic Processes: Ergodic Trading Model and Call Option Pricing Using the Irrational Rotation

Due to the increasing popularity of futures trading among financial market participants, the risk management of these instruments is crucial. In this paper, we introduce a model for estimating the ideal time for leaving a trading position on a stock. Also, using ergodic theorems, we investigate the European call option pricing problem using a stochastic irrational rotation on the unit circle. Utilizing the properties of log-ergodic processes, we use the time average of the stochastic process of risky assets instead of expectations in our calculations.

math.PR↗

arXiv2023

Log-ergodicity: A New Concept for Modeling Financial Markets

Although financial models violate ergodicity in general, observing the ergodic behavior in the markets is not rare. Policymakers and market participants control the market behavior in critical and emergency states, which leads to some degree of ergodicity as their actions are intentional. In this paper, we define a parametric operator that acts on the space of positive stochastic processes, transforming a class of positive stochastic processes into mean-ergodic processes. With this mechanism, we extract the data regarding the ergodic behavior hidden in the financial model, apply it to mathematical finance, and establish a novel method for pricing contingent claims. We provide some empirical examples and compare the results with existing ones to demonstrate the efficacy of this new approach.

math.PR↗