The Owl Explains Hootenanny

Chris Giancarlo (Chamber of Digital Commerce and former CFTC commissioner) sheds light on the role of privacy, economic liberty, and leadership in navigating the ever-changing landscape of digital innovation and its impact on global economies.

Teana Baker-Taylor (Circle) and Ari Redbord (TRM Labs) delve into the intricate world of crypto regulation, anti-money laundering, and blockchain's transformative potential. They discuss how decentralized finance challenges traditional frameworks, the evolving landscape of policy-making, and the impact of tokenization on established financial systems. Explore the societal and financial shifts instigated by groundbreaking blockchain technology and recent policy developments.

This episode discusses the costs of liquidity provision at Decentralized Exchanges. Ciamac Moallemi (Columbia University) explains that liquidity providers at a Decentralized Exchange always face a loss relative to an asset portfolio that actively rebalances to match the asset weighting of the Decentralized Exchange at all times. This loss, known as Loss-Versus-Rebalancing (LVR, pronounced 'Lever'), is the primary cost of liquidity provision. Design refinements to mitigate this cost are discussed. Paper: Automated Market Making and Loss-Versus-Rebalancing

This episode discusses lending platforms on blockchains. Thomas Rivera (McGill University) and Quentin Vandeweyer (University of Chicago) explain that lending platforms generate sub-optimal welfare due to under-utilization of funds that are lent to the platform. To provide more context, lending platforms are specified in such a way that the level of borrowing (relative to lending) necessarily fluctuates with market conditions, resulting in instances where borrowing is significantly below lending. Importantly, when borrowing is significantly below lending, the total interest accrued from borrowers (relative to lending volume) is necessarily low, yielding low interest rates for lenders and thereby discouraging lending. Potential improvements for lending platforms are discussed. Paper: Equilibrium in a DeFi Lending Market

This episode discusses a phenomenon known as Just-In-Time Liquidity at Decentralized Exchanges. Agostino Capponi (Columbia University) explains that, while this phenomenon is generally viewed as positive for liquidity demanders, it can actually undermine liquidity provision. More specifically, JIT liquidity providers can pick-and-choose the best trades, which reduces the incentive for passive liquidity providers to offer liquidity. The consequent reduction in passive liquidity can lead to lower overall liquidity. Paper: The Paradox Of Just-In-Time Liquidity In Decentralized Exchanges: More Can Sometimes Mean Less

Brett Falk (University of Pennsylvania) and Gerry Tsoukalas (Boston University) discuss voting protocols in Decentralized Autonomous Organizations. Brett Falk (University of Pennsylvania) and Gerry Tsoukalas (Boston University) highlight weaknesses in existing voting protocols. An important point is that many voting protocols weight votes based on token holdings but a voter’s token holdings does not, in general, reflect the level of information that the voter has with regard to a voting proposal. The consequence of this misalignment between a voter’s weight and a voter’s information is suboptimal welfare outcomes. Paper: Token-Weighted Crowdsourcing and Balancing Power in Decentralized Governance

Lewis Cohen (DLx Law) discusses whether cryptoassets are securities from the perspective of US law. Lewis Cohen (DLx Law) explains the relevant US securities laws and then highlights how cryptoassets can differ from traditional securities. A key point is that many cryptoassets do not confer rights in the manner of traditional securities, instead conferring abilities. Cryptoassets thus might require a novel regulatory framework. Paper: The Ineluctable Modality of Securities Law

Today’s internet is awash with misinformation, illegal and harmful content sparking debates around content moderation versus freedom of speech.

The owl is wondering: How does blockchain enhance security compared to traditional databases? Why is security so important in the development process of blockchain technology? How are emerging technologies like AI and machine learning being leveraged to enhance blockchain security? Join us in our new podcast John Neufeld, GC at Open Zeppelin, as we discover this and much more… 

Acompáñanos mientras Sylvia y Leandro nos presentan el Árbol de la Sabiduría: cinco ramas para guiar la regulación de la blockchain y Web3. Empezaremos estableciendo los cimientos sobre la blockchain y desmitificando conceptos. Luego, hablaremos sobre tokenización, casos de uso y diferentes categorías de tokens. Después, veremos cómo está el ambiente regulatorio en esta industria y cerraremos con conceptos referentes. 

Following our latest episode on the digital pound, we keep exploring the future of money by looking at the European Union’s ambitious plans for a euro CBDC. Back in June, the European Commission proposed a legislative framework for a retail digital euro, and its potential is now being assessed by the European Central Bank (ECB). In just a week, the ECB will decide if the project will move from an ‘investigation phase’ to a ‘realization phase’, where technical solutions will be developed and tested. The EU is determined to be a frontrunner in CBDC policy, and has made it clear that any form of digital public money will reflect its shared values of privacy, security, and inclusiveness. Yet, reactions to the Commission's proposal have been mixed. Concerns have been raised over policymakers being able to decide what Europeans can spend their money on, or having access to their personal data. Some foresee the decline of cash, while others simply don’t see the difference between using a digital euro and existing mobile payment apps. If Europe wants to make central digital currency a reality, it will need to bring on board not only retail users – but also banks, merchants, businesses, and technology providers. Get up to speed on what the digital euro could look like by tuning into our conversation with Anne-Sophie Gógl, Board Member of the Digital Euro Association, and Peter Kerstens, Adviser for Technological Innovation and Cybersecurity at the European Commission.