Papers for
financial platform operators
Papers whose findings have a practical use for this group, as judged from the abstract. Open a paper to read what it means in practice.
Lenders profit more when supply information is shared unevenly
Asymmetric Information in Dynamic Lending Games
Abstract: We study a dynamic lending game with limited but reusable supply. Borrower arrivals and loan durations are stochastic. Demand is allocated cheapest-first, subject to available supply, so a lender's quote affects both its current payoff and its ability to serve future borrowers. Motivated by industry practice, we study this problem through the lens of information disclosure: Lenders observe either only their own available supply or also their rivals' aggregate available supply. We ask how providing this information to all, some or none of the lenders affects payoffs as demand varies relative to supply, and how these effects change when a fixed total supply is divided among different numbers of lenders. Interestingly, in the case of asymmetric information disclosure, total payoffs can increase, while total lending remains the same. We identify sufficient mathematical regimes in which this phenomenon occurs. Who receives supply information matters differently as demand rises. For the case of two lenders, informing only the larger lender yields higher total lender payoff at lower demand, while informing only the smaller lender can yield the highest total lender payoff at higher demand. For a platform deciding which lenders can observe rival supply, the results suggest that disclosure can change the fees paid by borrowers without changing how much is lent. Wider access to supply information need not lower those fees: its effect depends on who receives the information and the balance between demand and supply.
Defi vaults systematized through architectures and governance models
A Systematization of Knowledge on DeFi Vaults: Architectures, Curation Mechanisms, and Strategy Design
Abstract: Decentralized finance (DeFi) vaults are smart-contract-based asset management systems that pool deposits, execute programmable strategies, and mint tokenized shares representing claims on underlying assets and strategy performance. As vault designs have evolved from early yield aggregators to modular, actively managed systems, a new control layer, curation, has emerged to select strategies, configure risk parameters, and coordinate operational execution, introducing principal-agent dynamics and new failure modes. This paper systematizes DeFi vault architectures and curator-mediated control planes through (i) a unified system model and formal definitions for share accounting, roles, and operational dependencies, and (ii) three complementary taxonomies covering vault exposures and objectives, curator governance and accountability mechanisms, and strategy execution patterns together with their failure modes. We further map a representative set of production protocols to the proposed dimensions. The frameworks in this work aim to support rigorous analysis and safer design of blockchain-based financial applications.