Gillmore Centre Seminar on Equilibrium in a Decentralized Finance Lending Market

Hosted by Ruslan SverchkovLink opens in a new window - Assistant Professor of Finance at Warwick Business School

Speaker: Fahad SalehLink opens in a new window is an Associate Professor of Finance and the Nunnenkamp-Cinelli Faculty Fellow at Wake Forest University.

Fahad will examine a lending platform on blockchain. Notably, a blockchain lending platform suffers a disadvantage relative to a traditional lending platform in that a blockchain lending platform is unable to incorporate off-chain information when setting borrowing and lending rates. He will demonstrate that the referenced disadvantage implies that a blockchain lending equilibrium is sub-optimal when compared to a competitive lending market equilibrium. Also, offer a modification of the blockchain interest rate setting specification and demonstrate that this modification generates equilibrium interest rates, and therefore welfare, that is arbitrarily close to a competitive lending market equilibrium.