Decentralized Finance


The purpose of this course is to discuss the emerging area of Decentralized Finance (or DeFi). DeFi has experienced an unprecedented growth, with hundreds of projects and a countless stream of financial, distributed systems, and blockchain innovations. The total value locked (TVL) in decentralized finance ? a measure of the total value of assets committed to the DeFi ecosystem ? has reached over $80 billion. When compared to the traditional centralized finance (CeFi), DeFi offers products and services serving similar financial goals, but critically innovates with novel capabilities such as instantaneous multi-billion USD flash loans. By utilizing blockchain and smart contract technologies, DeFi as a whole aims to provide a new platform for programmable, automated finance services that remove the reliance on central trust and intermediaries. The main goal of this course is to provide a framework to understand this new area of financial services. For each finance function, we will consider 1) the current intermediated structure, and then b) the DeFi version (actual or proposed) that fulfills the function. Is either one of these optimal? We will evaluate both through the lens of CS and finance. Is the application computable (efficiency, decidable), programmable (automatic)? Is the application welfare-enhancing and stable (not a source of systemic risk). How do the new and old systems interact? The aim is for students to be able to critically evaluate whether a new DeFi protocol is novel and practical. We further will capture the security danger in DeFi, as well as their impact on the underlying consensus security. Lastly, we hope to give an insight into how to program and structure secure and incentive-compatible DeFi applications. 

General characterization





Responsible teacher

Afonso Fuzeta Da Ponte Da Cunha De Eça


Weekly - Available soon

Total - Available soon

Teaching language






Teaching method

Lectures: will concentrate on case study discussions about fintech start-ups

Assigned readings: articles and book chapters

Group assignments: Two assignments

Final exam: will cover lectures, readings assigned in the textbook, additional readings, and materials distributed during class time. The exams will be open book.

Evaluation method

Group assignments (2 x 25%) 50% Exam 50% 

Subject matter

1 Introduction to DeFi (vs CeFi)

2 Blockchain technology

3 Smart contracts

4 Old money technology

5 Decentralized Exchanges

6 Decentralized Lending

7 Stablecoins

8 Oracles

9 Synthetics and Derivatives

10 Privacy on the blockchain

11 DeFi Security

12 Regulation and legal frameworks (Europe an US centric)


Programs where the course is taught: