Dear all,

We would like to announce the following two Online Seminars @SNS:

*November 25, 2021 at 4PM (CEST)*

*Speaker: *Dr. Andrea Barbon (HSG) [webpage: http://www.abarbon.com/]

*Title: *On The Quality Of Cryptocurrency Markets Centralized Versus Decentralized Exchanges (joint work with Prof. Angelo Ranaldo (HSG)).

*Abstract: * Despite the growing adoption of decentralized exchanges, not much is yet known about their market quality. To shed some light on this issue, we study cryptocurrencies by comparing decentralized blockchain-based venues (DEX) to centralized crypto exchanges (CEX) by assessing two key aspects of market quality: price efficiency and market liquidity. Using a novel and comprehensive data set, we find that overall CEX provide better market quality but CEX becomes competitive if transaction costs exceed 100,000$. Further, the main determinant of the lower price-efficiency of DEX is the high gas price stemming from proof-of work blockchains. We propose and empirically validate a stylized theory of DEX liquidity provision, which links trading volumes, protocol fees, and liquidity in equilibrium. Our model prefigures the possible scenarios of efficiency paths for DEX to overtake CEX.

*Link: * https://teams.microsoft.com/l/meetup-join/19%3ameeting_ZDFlZmJkNDItYmVlNC00Z...

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*December 10, 2021 at 3PM (CEST)*

*Speaker: *Prof. Agostino Capponi (Columbia University)

*Title: * The Adoption of Blockchain-based Decentralized Exchanges (joint work with Dr. Ruizhe Jia) *Abstract: *We show that the blockchain order execution mechanism and liquidity pooling create arbitrage rents in decentralized exchanges. The arbitrage rent raises the cost of liquidity provision and imposes negative externalities on users of the underlying blockchain. In equilibrium, automated market makers (AMMs) are adopted by liquidity providers only if exchange rates of token pairs are sufficiently stable. A pricing curve with higher curvature reduces arbitrage rents, but also decreases trading activities. We provide statistical support for our main model implications using transaction-level data of AMMs.

*Link: * https://teams.microsoft.com/l/meetup-join/19%3ameeting_NjAyODk0YzQtNmVmYS00O...

We are looking forward to seeing you at the seminars!

Best regards, Giulia