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William Knottenbelt

Publications and source records attributed to William Knottenbelt.

34 records · Page 2Linked to original sources
arXiv2024

Market Misconduct in Decentralized Finance (DeFi): Analysis, Regulatory Challenges and Policy Implications

Technological advancement drives financial innovation, reshaping the traditional finance landscape and redefining user-market interactions. The rise of blockchain and Decentralized Finance (DeFi) underscores this intertwined evolution of technology and finance. While DeFi has introduced exciting opportunities, it has also exposed the ecosystem to new forms of market misconduct. This paper aims to bridge the academic and regulatory gaps by addressing key research questions about market misconduct in DeFi. We begin by discussing how blockchain technology can potentially enable the emergence of novel forms of market misconduct. We then offer a comprehensive definition and taxonomy for understanding DeFi market misconduct. Through comparative analysis and empirical measurements, we examine the novel forms of misconduct in DeFi, shedding light on their characteristics and social impact. Subsequently, we investigate the challenges of building a tailored regulatory framework for DeFi. We identify key areas where existing regulatory frameworks may need enhancement. Finally, we discuss potential approaches that bring DeFi into the regulatory perimeter.

q-fin.CP↗
arXiv2024

UKFin+: A Research Agenda for Financial Services

This document presents a research agenda for financial services as a deliverable of UKFin+, a Network Plus grant funded by the Engineering and Physical Sciences Research Council. UKFin+ fosters research collaborations between academic and non-academic partners directed at tackling complex long-term challenges relevant to the UK's financial services sector. Confronting these challenges is crucial to promote the long-term health and international competitiveness of the UK's financial services industry. As one route to impact, UKFin+ includes dedicated funding streams for research collaborations between academic researchers and non-academic organisations. The intended audience of this document includes researchers based in academia, academic funders, as well as practitioners based in industry, regulators, charities or NGOs. It is not intended to be comprehensive or exhaustive in scope but may provide applicants to UKFin+ funding streams and other funding bodies with inspiration for their proposals or at least an understanding of how their proposals align with the broader needs of the UK financial services industry.

cs.CE↗
arXiv2024

SoK: Bitcoin Layer Two (L2)

We present the first Systematization of Knowledge (SoK) on constructing Layer Two (L2) solutions for Bitcoin. We carefully examine a representative subset of ongoing Bitcoin L2 solutions (40 out of 335 extensively investigated cases) and provide a concise yet impactful identification of six classic design patterns through two approaches (i.e., modifying transactions \& creating proofs). Notably, we are the first to incorporate the inscription technology (emerged in mid-2023), along with a series of related innovations. We further establish a reference framework that serves as a baseline criterion ideally suited for evaluating the security aspects of Bitcoin L2 solutions, and which can also be extended to broader L2 applications. We apply this framework to evaluate each of the projects we investigated. We find that the inscription-based approaches introduce new functionality (i.e., programability) to Bitcoin systems, whereas existing proof-based solutions primarily address scalability challenges. Our security analysis reveals new attack vectors targeting data/state (availability, verification), assets (withdrawal, recovery), and users (disputes, censorship).

cs.CR↗
arXiv2024

Decoding SEC Actions: Enforcement Trends through Analyzing Blockchain litigation using LLM-based Thematic Factor Mapping

The proliferation of blockchain entities (persons or enterprises) exposes them to potential regulatory actions (e.g., being litigated) by regulatory authorities. Regulatory frameworks for crypto assets are actively being developed and refined, increasing the likelihood of such actions. The lack of systematic analysis of the factors driving litigation against blockchain entities leaves companies in need of clarity to navigate compliance risks. This absence of insight also deprives investors of the information for informed decision-making. This study focuses on U.S. litigation against blockchain entities, particularly by the U.S. Securities and Exchange Commission (SEC) given its influence on global crypto regulation. Utilizing frontier pretrained language models and large language models, we systematically map all SEC complaints against blockchain companies from 2012 to 2024 to thematic factors conceptualized by our study to delineate the factors driving SEC actions. We quantify the thematic factors and assess their influence on specific legal Acts cited within the complaints on an annual basis, allowing us to discern the regulatory emphasis, patterns and conduct trend analysis.

cs.CL↗
arXiv2024

Offline Model-Based Reinforcement Learning with Anti-Exploration

Model-based reinforcement learning (MBRL) algorithms learn a dynamics model from collected data and apply it to generate synthetic trajectories to enable faster learning. This is an especially promising paradigm in offline reinforcement learning (RL) where data may be limited in quantity, in addition to being deficient in coverage and quality. Practical approaches to offline MBRL usually rely on ensembles of dynamics models to prevent exploitation of any individual model and to extract uncertainty estimates that penalize values in states far from the dataset support. Uncertainty estimates from ensembles can vary greatly in scale, making it challenging to generalize hyperparameters well across even similar tasks. In this paper, we present Morse Model-based offline RL (MoMo), which extends the anti-exploration paradigm found in offline model-free RL to the model-based space. We develop model-free and model-based variants of MoMo and show how the model-free version can be extended to detect and deal with out-of-distribution (OOD) states using explicit uncertainty estimation without the need for large ensembles. MoMo performs offline MBRL using an anti-exploration bonus to counteract value overestimation in combination with a policy constraint, as well as a truncation function to terminate synthetic rollouts that are excessively OOD. Experimentally, we find that both model-free and model-based MoMo perform well, and the latter outperforms prior model-based and model-free baselines on the majority of D4RL datasets tested.

cs.LG↗
arXiv2024

Offline Reinforcement Learning with Behavioral Supervisor Tuning

Offline reinforcement learning (RL) algorithms are applied to learn performant, well-generalizing policies when provided with a static dataset of interactions. Many recent approaches to offline RL have seen substantial success, but with one key caveat: they demand substantial per-dataset hyperparameter tuning to achieve reported performance, which requires policy rollouts in the environment to evaluate; this can rapidly become cumbersome. Furthermore, substantial tuning requirements can hamper the adoption of these algorithms in practical domains. In this paper, we present TD3 with Behavioral Supervisor Tuning (TD3-BST), an algorithm that trains an uncertainty model and uses it to guide the policy to select actions within the dataset support. TD3-BST can learn more effective policies from offline datasets compared to previous methods and achieves the best performance across challenging benchmarks without requiring per-dataset tuning.

cs.LG↗
arXiv2024

Defending Against Poisoning Attacks in Federated Learning with Blockchain

In the era of deep learning, federated learning (FL) presents a promising approach that allows multi-institutional data owners, or clients, to collaboratively train machine learning models without compromising data privacy. However, most existing FL approaches rely on a centralized server for global model aggregation, leading to a single point of failure. This makes the system vulnerable to malicious attacks when dealing with dishonest clients. In this work, we address this problem by proposing a secure and reliable FL system based on blockchain and distributed ledger technology. Our system incorporates a peer-to-peer voting mechanism and a reward-and-slash mechanism, which are powered by on-chain smart contracts, to detect and deter malicious behaviors. Both theoretical and empirical analyses are presented to demonstrate the effectiveness of the proposed approach, showing that our framework is robust against malicious client-side behaviors.

cs.LG↗
arXiv2021

A Scalable Inference Method For Large Dynamic Economic Systems

The nature of available economic data has changed fundamentally in the last decade due to the economy's digitisation. With the prevalence of often black box data-driven machine learning methods, there is a necessity to develop interpretable machine learning methods that can conduct econometric inference, helping policymakers leverage the new nature of economic data. We therefore present a novel Variational Bayesian Inference approach to incorporate a time-varying parameter auto-regressive model which is scalable for big data. Our model is applied to a large blockchain dataset containing prices, transactions of individual actors, analyzing transactional flows and price movements on a very granular level. The model is extendable to any dataset which can be modelled as a dynamical system. We further improve the simple state-space modelling by introducing non-linearities in the forward model with the help of machine learning architectures.

econ.EM↗
arXiv2018

Towards Safer Smart Contracts: A Survey of Languages and Verification Methods

With a market capitalisation of over USD 205 billion in just under ten years, public distributed ledgers have experienced significant adoption. Apart from novel consensus mechanisms, their success is also accountable to smart contracts. These programs allow distrusting parties to enter agreements that are executed autonomously. However, implementation issues in smart contracts caused severe losses to the users of such contracts. Significant efforts are taken to improve their security by introducing new programming languages and advance verification methods. We provide a survey of those efforts in two parts. First, we introduce several smart contract languages focussing on security features. To that end, we present an overview concerning paradigm, type, instruction set, semantics, and metering. Second, we examine verification tools and methods for smart contract and distributed ledgers. Accordingly, we introduce their verification approach, level of automation, coverage, and supported languages. Last, we present future research directions including formal semantics, verified compilers, and automated verification.

cs.CR↗
arXiv2016

Does disaggregated electricity feedback reduce domestic electricity consumption? A systematic review of the literature

We examine 12 studies on the efficacy of disaggregated energy feedback. The average electricity reduction across these studies is 4.5%. However, 4.5% may be a positively-biased estimate of the savings achievable across the entire population because all 12 studies are likely to be prone to opt-in bias hence none test the effect of disaggregated feedback on the general population. Disaggregation may not be required to achieve these savings: Aggregate feedback alone drives 3% reductions; and the 4 studies which directly compared aggregate feedback against disaggregated feedback found that aggregate feedback is at least as effective as disaggregated feedback, possibly because web apps are viewed less often than in-home-displays (in the short-term, at least) and because some users do not trust fine-grained disaggregation (although this may be an issue with the specific user interface studied). Disaggregated electricity feedback may help a motivated sub-group of the population to save more energy but fine-grained disaggregation may not be necessary to achieve these energy savings. Disaggregation has many uses beyond those discussed in this paper but, on the specific question of promoting energy reduction in the general population, there is no robust evidence that current forms of disaggregated energy feedback are more effective than aggregate energy feedback. The effectiveness of disaggregated feedback may increase if the general population become more energy-conscious (e.g. if energy prices rise or concern about climate change deepens); or if users' trust in fine-grained disaggregation improves; or if innovative new approaches or alternative disaggregation strategies (e.g. disaggregating by behaviour rather than by appliance) out-perform existing feedback. We also discuss opportunities for new research into the effectiveness of disaggregated feedback.

cs.CY↗
arXiv2015

Neural NILM: Deep Neural Networks Applied to Energy Disaggregation

Energy disaggregation estimates appliance-by-appliance electricity consumption from a single meter that measures the whole home's electricity demand. Recently, deep neural networks have driven remarkable improvements in classification performance in neighbouring machine learning fields such as image classification and automatic speech recognition. In this paper, we adapt three deep neural network architectures to energy disaggregation: 1) a form of recurrent neural network called `long short-term memory' (LSTM); 2) denoising autoencoders; and 3) a network which regresses the start time, end time and average power demand of each appliance activation. We use seven metrics to test the performance of these algorithms on real aggregate power data from five appliances. Tests are performed against a house not seen during training and against houses seen during training. We find that all three neural nets achieve better F1 scores (averaged over all five appliances) than either combinatorial optimisation or factorial hidden Markov models and that our neural net algorithms generalise well to an unseen house.

cs.NE↗
arXiv2015

The UK-DALE dataset, domestic appliance-level electricity demand and whole-house demand from five UK homes

Many countries are rolling out smart electricity meters. These measure a home's total power demand. However, research into consumer behaviour suggests that consumers are best able to improve their energy efficiency when provided with itemised, appliance-by-appliance consumption information. Energy disaggregation is a computational technique for estimating appliance-by-appliance energy consumption from a whole-house meter signal. To conduct research on disaggregation algorithms, researchers require data describing not just the aggregate demand per building but also the `ground truth' demand of individual appliances. In this context, we present UK-DALE: an open-access dataset from the UK recording Domestic Appliance-Level Electricity at a sample rate of 16 kHz for the whole-house and at 1/6 Hz for individual appliances. This is the first open access UK dataset at this temporal resolution. We recorded from five houses, one of which was recorded for 655 days, the longest duration we are aware of for any energy dataset at this sample rate. We also describe the low-cost, open-source, wireless system we built for collecting our dataset.

cs.OH↗
arXiv2014

Demo Abstract: NILMTK v0.2: A Non-intrusive Load Monitoring Toolkit for Large Scale Data Sets

In this demonstration, we present an open source toolkit for evaluating non-intrusive load monitoring research; a field which aims to disaggregate a household's total electricity consumption into individual appliances. The toolkit contains: a number of importers for existing public data sets, a set of preprocessing and statistics functions, a benchmark disaggregation algorithm and a set of metrics to evaluate the performance of such algorithms. Specifically, this release of the toolkit has been designed to enable the use of large data sets by only loading individual chunks of the whole data set into memory at once for processing, before combining the results of each chunk.

cs.OH↗
arXiv2014

Metadata for Energy Disaggregation

Energy disaggregation is the process of estimating the energy consumed by individual electrical appliances given only a time series of the whole-home power demand. Energy disaggregation researchers require datasets of the power demand from individual appliances and the whole-home power demand. Multiple such datasets have been released over the last few years but provide metadata in a disparate array of formats including CSV files and plain-text README files. At best, the lack of a standard metadata schema makes it unnecessarily time-consuming to write software to process multiple datasets and, at worse, the lack of a standard means that crucial information is simply absent from some datasets. We propose a metadata schema for representing appliances, meters, buildings, datasets, prior knowledge about appliances and appliance models. The schema is relational and provides a simple but powerful inheritance mechanism.

cs.DB↗
arXiv2014

NILMTK: An Open Source Toolkit for Non-intrusive Load Monitoring

Non-intrusive load monitoring, or energy disaggregation, aims to separate household energy consumption data collected from a single point of measurement into appliance-level consumption data. In recent years, the field has rapidly expanded due to increased interest as national deployments of smart meters have begun in many countries. However, empirically comparing disaggregation algorithms is currently virtually impossible. This is due to the different data sets used, the lack of reference implementations of these algorithms and the variety of accuracy metrics employed. To address this challenge, we present the Non-intrusive Load Monitoring Toolkit (NILMTK); an open source toolkit designed specifically to enable the comparison of energy disaggregation algorithms in a reproducible manner. This work is the first research to compare multiple disaggregation approaches across multiple publicly available data sets. Our toolkit includes parsers for a range of existing data sets, a collection of preprocessing algorithms, a set of statistics for describing data sets, two reference benchmark disaggregation algorithms and a suite of accuracy metrics. We demonstrate the range of reproducible analyses which are made possible by our toolkit, including the analysis of six publicly available data sets and the evaluation of both benchmark disaggregation algorithms across such data sets.

stat.AP↗