Thorsten Koeppl

Author

Staff working papers

Understanding DeFi Through the Lens of a Production-Network Model

Staff Working Paper 2023-42 Jonathan Chiu, Thorsten Koeppl, Hanna Yu, Shengxing Zhang
We develop a production-network model to capture how decentralized finance (DeFi) has evolved across different sectors of financial services. The model allows us to measure the value added by different DeFi sectors and to study how the connections across the sectors influence token prices.

Grasping De(centralized) Fi(nance) Through the Lens of Economic Theory

Staff Working Paper 2022-43 Jonathan Chiu, Charles M. Kahn, Thorsten Koeppl
We analyze the value proposition and limitations of decentralized finance (DeFi). Based on a distributed ledger and smart contracts, DeFi can guarantee the execution of financial contracts, potentially lowering the costs of intermediation and improving financial inclusion.

PayTech and the D(ata) N(etwork) A(ctivities) of BigTech Platforms

Staff Working Paper 2022-35 Jonathan Chiu, Thorsten Koeppl
Why do BigTech platforms introduce payment services? We explore this using a model in which a monopoly platform faces a trade-off between the costs associated with privacy concerns and the revenue from data services. We then analyze the feedback effects between data and payments.

Blockchain-Based Settlement for Asset Trading

Staff Working Paper 2018-45 Jonathan Chiu, Thorsten Koeppl
Can securities be settled on a blockchain and, if so, what are the gains relative to existing settlement systems? We consider a blockchain that ensures delivery versus payment by linking transfers of assets with payments and operates using a proof-of-work protocol. The main benefit of a blockchain is faster and more flexible settlement, whereas the challenge is to avoid settlement fails when participants fork the chain to get rid of trading losses.

Incentive Compatibility on the Blockchain

Staff Working Paper 2018-34 Jonathan Chiu, Thorsten Koeppl
A blockchain is a digital ledger that keeps track of a record of ownership without the need for a designated party to update and enforce changes to the record. The updating of the ledger is done directly by the users of the blockchain and is traditionally governed by a proof-of-work (PoW) protocol.

Trading Dynamics with Adverse Selection and Search: Market Freeze, Intervention and Recovery

Staff Working Paper 2011-30 Jonathan Chiu, Thorsten Koeppl
We study the trading dynamics in an asset market where the quality of assets is private information of the owner and finding a counterparty takes time. When trading of a financial asset ceases in equilibrium as a response to an adverse shock to asset quality, a large player can resurrect the market by buying up lemons which involves assuming financial losses.
Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Financial stability JEL Code(s): E, E6, G, G1

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