Managing Risk in DeFi Portfolios

Hugo Inzirillo and Stanislas de Quenetain

Papers from arXiv.org

Abstract: Decentralized Finance (DeFi) is a new financial industry built on blockchain technologies. Decentralized financial services have consequently increased the ability to lend, borrow, and invest in decentralized investment vehicles, allowing investors to bypass third party intermediaries. DeFi's promise is to reduce the cost of transaction and management fees whilst increasing trust between agents of the Financial Industry 3.0. This paper provides an overview of the different components of DeFi, as well as the risks involved in investing through these new vehicles. We will also propose an allocation methodology which will integrate and quantify these risks.

Date: 2022-05, Revised 2022-09
New Economics Papers: this item is included in nep-fmk, nep-pay and nep-rmg
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