The Tension Between Divergence Loss and Profit in Automated Market Makers
Reading Time: 5 minutes
In today’s post we take the perspective of a liquidity provider (LP) and ask: how much you can expect to earn by providing tokens to the reserve pools?
Cost of Price Manipulation in Uniswap and Balancer
Reading Time: 5 minutes
Uniswap, Balancer, and Curve have achieved to construct purely peer-to-peer exchanges which do not require any intermediary, and attracted already many users. But it is important to bear in mind that things could go wrong when using these AMMs naively as a price oracles.
Automated Market Making Mechanisms and Issues in Uniswap, Balancer, and Curve
Reading Time: 3 minutes
Early decentralized exchange (DEX) proposals took their inspiration from classical exchange markets and made use of order books to match sell and buy orders. A complementary approach to offchain order books for decentralized exchanges uses the concept of automated market makers (AMMs). In this post we look at the basics of the following three AMM projects: Uniswap, Balancer, and Curve.
Censorship of Harmful Data in Blockchains
Reading Time: 17 minutes
Public blockchains allow insertion of arbitrary data. Even specific-purpose blockchains like Bitcoin already contain a lot of non-financial data. Although this data insertion can be beneficial in some use cases (e.g. proof of existence), it can also cause damage. If a blockchain contained videos with instructions on how to torture someone, there would immediately be broad consensus that this data must be deleted. But since blockchains are supposed to be immutable databases, the question is: what can be done if this happens?
What are the Benefits of Threshold Signatures for Crypto Wallets?
Reading Time: 6 minutes
The security of your crypto-assets depends on one piece of information that you must protect: your private key. If your private key is stolen, all your assets can be stolen. If your private key is lost, all your assets are lost.
Immutability: Is There a Limit?
Reading Time: 14 minutes
Any information stored in a blockchain is supposed to be preserved forever, nobody will be able to change it or even less erase it. But is this really true? Is there any chance that governments or private groups with enough money to finance costly attacks might delete information from a blockchain?
Publishing Text and Images in Bitcoin
Reading Time: 4 minutes
Blockchains are already used to store non-financial data for diverse purposes, e.g. to prove authorship of ideas or to prove the existence of a document. One of the largest files stored successfully into the Bitcoin blockchain is an image of Nelson Mandela.
A Short Guide Through the Universe of Blockchain Based Micropayment Systems
Reading Time: 7 minutes
Micropayment take place in pay-as-you-go software service models, micro donations, and the Internet of Things (IoT). In these contexts payments for values which are usually under the smallest unit of fiat money (e.g. $0.001) are needed. Prepaid cards can solve this problem. Another approach uses cryptocurrencies in the blockchain, having the advantage of allowing exact […]
Some Insights into Cardano ´s Blockchain
Reading Time: 5 minutes
In this blog post, we present a high-level overview of the paper describing the Ouroboros Proof of Stake protocol implemented in Cardano´s blockchain. After the overview follow some comments about theoretical aspects of the protocol.
In general, Proof of Stake (PoS) consensus protocols elect the network nodes responsible to send the next block to the blockchain on the basis of the nodes’ amount of stake.
Comparison of PoS projects: Unbiased Leader Election
Reading Time: 7 minutes
Prior to the Bitcoin blockchain of “Satoshi Nakamoto”, distributed ledger systems were lacking two important properties which are essential for a decentralized digital cash system. The first property which existing distributed ledger systems were missing, was the ability to scale to a network of millions of users. And secondly, systems at the time were not permissionless
Survey of Blockchain Storage and Computing Services
Reading Time: 10 minutes
Introduction Public blockchains are not suited to function as a data storage provider. Since they are append-only ledgers, storing many large files would result in a dramatic increase of the whole distributed ledger. That would force the network nodes to store huge databases leaving it in the hands of just a few providers. Likewise, the […]
Survey of Decentralized Exchanges
Reading Time: 6 minutes
Cryptocurrency Exchanges Anyone who wants to get into the cryptocurrency market and does not want to mine blocks needs to exchange his fiat money at an exchange, the only alternative to this is to get cryptocurrency from another holder. Centralized exchanges like Bitfinex, Coinbase, Kraken, Poloniex or Shapeshift intermediate the bid and offer matching process […]