Abstract

This course offers an in-depth exploration of Decentralized Finance (DeFi), a rapidly evolving field at the intersection of blockchain technology and financial innovation. It is designed for students seeking to understand both the conceptual foundations and practical implications of DeFi.

After reviewing the fundamental principles of blockchains and how they enable the deployment of smart contracts, we will examine major DeFi protocols, including Decentralized Exchanges (DEXs), staking, stablecoins, and lending and borrowing platforms. The course will emphasize how smart contracts allow these services to interoperate, creating a programmable and permissionless financial ecosystem.

Objective of the course

The course will analyze how DeFi disrupts traditional finance by replacing intermediaries and lowering barriers to entry. At the same time, it will also provide a critical assessment of systemic risks and vulnerabilities specific to DeFi, such as smart contract exploits, oracle manipulation, and liquidity risks.

By the end of the course, participants will have developed a nuanced understanding of DeFi’s technological underpinnings and real-world applications. They will be equipped to interact with DeFi platforms, evaluate opportunities and risks, and follow emerging developments in this rapidly evolving subfield of digital finance.

Language: English

Index: Cryptography, Distributed Consensus, Blockchains, Smart-Contracts, Tokenomics, Staking, Automated Market Makers, Lending and Borrowing Protocols

Schedule

Monday

• Introduction to Cryptography and Distributed Consensus
• Proof of Work (Bitcoin) vs. Proof of Stake (Ethereum)

Tuesday

• Transaction Fee Mechanisms
• Liquid Staking and Restaking

Wednesday

• Tokenomics

Thursday

• Decentralized Exchanges (AMMs)

Friday

• Lending and Borrowing Platforms
• Stablecoins

Short Bibliography

• Bertucci, Louis and Julien Prat, A Hitchhiker’s Guide to Decentralized Finance, 2022
• Campbell, Harvey, Ashwin Ramachandran and Joey Santoro, DeFi and the Future of Finance, 2021, Wiley
• Narayanan, Arvind, Joseph Bonneau, Edward Felten, Andrew Miller and Steven Goldfeder, Bitcoin and Cryptocurrency Technologies, 2016, Princeton University Press

Student’s preferred background

Having taken these courses will prove useful for the series of lectures: Introduction to Computer Science, Blockchains and Distributed Systems, Probability and Statistics. A knowledge of undergraduate Economics and Finance will also be helpful.