The Origins of Market Power in DeFi

Pablo Azar, Adrian Casillas () and Maryam Farboodi ()
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Maryam Farboodi: https://mitsloan.mit.edu/faculty/directory/maryam-farboodi

No 20250421, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: In our previous Liberty Street Economics post, we introduced the decentralized finance (DeFi) intermediation chain and explained how various players have emerged as key intermediaries in the Ethereum ecosystem. In this post, we summarize the empirical results in our new Staff Report that explains how the need for transaction privacy across the DeFi intermediation chain gives rise to intermediaries’ market power.

Keywords: financial intermediation; market power; decentralized finance (search for similar items in EconPapers)
JEL-codes: D43 D82 G14 G23 L14 L22 (search for similar items in EconPapers)
Date: 2025-04-21
New Economics Papers: this item is included in nep-com, nep-pay and nep-reg
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