Stablecoins 2.0: Economic Foundations and Risk-based Models

@article{KlagesMundt2020Stablecoins2E,
  title={Stablecoins 2.0: Economic Foundations and Risk-based Models},
  author={Ariah Klages-Mundt and D. Harz and L. Gudgeon and Jun-You Liu and Andreea Minca},
  journal={Proceedings of the 2nd ACM Conference on Advances in Financial Technologies},
  year={2020}
}
Stablecoins are one of the most widely capitalized type of cryptocurrency. However, their risks vary significantly according to their design and are often poorly understood. We seek to provide a sound foundation for stablecoin theory, with a risk-based functional characterization of the economic structure of stablecoins. First, we match existing economic models to the disparate set of custodial systems. Next, we characterize the unique risks that emerge in non-custodial stablecoins and develop… Expand

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