On September 9 at 2:30pm ET, the Wharton Initiative on Financial Policy and Regulation (WIFPR) will host a webinar on decentralized finance. WIFPR Director Itay Goldstein will moderate a virtual discussion with Cam Harvey (Duke), Joel Hasbrouck (NYU), and Fahad Saleh (University of Florida) on their new WIFPR white paper, “The Evolution of Decentralized Exchange: Risks, Benefits, and Oversight."
View the white paper here.
Abstract: A decentralized exchange or DEX is an application deployed on a blockchain that allows investors to exchange digital assets at pricing terms determined by a preset exchange rate formula. This technology has several unique features, including accessibility to all investors, transparency of pricing, and simultaneity of execution and settlement. Notably, trading via a DEX is feasible for any asset tokenized on a blockchain. In turn, given that assets such as stocks and bonds could be tokenized easily, it is particularly important to understand the risks posed by DEXs. This paper examines both the benefits and risks to investors from DEXs, explores the role of private and public liquidity pools and analyzes possible regulatory approaches.