Working with the large FIRN member institutions we have developed a virtual seminar series where all FIRN members can participate.
Please click on the links to register for the seminars. Once registered you will receive an email with the zoom code the day before the seminar.
Wednesday 1st June 2022, 12pm – 1pm (AEST). Seminar hosted by UTS
Joe Zhong, University of Melbourne
Title: Trust in DeFi: An Empirical Study of the Decentralized Exchange
Abstract: Abstract: We provide empirical evidence that the decentralized cryptocurrency exchange helps reveal the consensus on the value of the cryptocurrency. By examining how investors on Binance (the largest centralized cryptocurrency exchange) trade in response to prices on Binance and Uniswap (the largest decentralized cryptocurrency exchange), we find that Uniswap liquidity provision exerts a positive impact on Binance investor trading towards the Uniswap price. We do not find Binance liquidity provision shares a similar effect. Using the launch of the “yield-farming” program as a quasi-natural experiment, we establish the causal impact of Uniswap liquidity provision on trading. Our results reflect that Uniswap, a decentralized exchange built on blockchain and smart contracts, can gain investors’ trust in its ability to aggregate the consensus of the cryptocurrency’s value. Our findings shed light that the blockchain and smart contracts powered decentralized infrastructure has the potential to provide an alternative solution to cases where a consensus underwritten by a credible central party, e.g., a centralized exchange, is not feasible or too costly to obtain..
Friday 3 June, 11am – 12pm (AEST). Seminar hosted by University of Queensland
Wei Chi Shen, Singapore Management University
Title: Don’t trust, verify: The economics of scams in initial coin offerings
Abstract: Losses from fraud and financial scams are estimated to exceed U.S. $5 trillion annually. To study the economics of financial scams, we investigate the market for initial coin offerings (ICOs) using point-in-time data snapshots of 5,935 ICOs. Our evidence indicates that ICO issuers strategically screen for na¨ıve investors by misrepresenting the characteristics of their offerings across listing websites. Misrepresented ICOs have higher scam risk, and misrepresentations are unlikely to reflect unintentional mistakes. Using on-chain analysis of Ethereum wallets, we find that less sophisticated investors are more likely to invest in misrepresented ICOs. We estimate that 40% of ICOs (U.S. $12 billion) in our sample are scams. Overall, our findings uncover how screening strategies are used in financial scams and reinforce the importance of conducting due diligence.
Click here to access the paper