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2 posts on "Maryam Farboodi"
April 21, 2025

The Origins of Market Power in DeFi

Pablo D. Azar, Adrian G. Casillas, and Maryam Farboodi

Photoillustration of blockchain in colors of blue.

In our previous Liberty Street Economics post, we introduced the decentralized finance (DeFi) intermediation chain and explained how various players have emerged as key intermediaries in the Ethereum ecosystem. In this post, we summarize the empirical results in our new Staff Report that explains how the need for transaction privacy across the DeFi intermediation chain gives rise to intermediaries’ market power.  

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Posted at 7:00 am in Cryptocurrencies, Financial Intermediation | Permalink | Comments (0)
August 5, 2024

The DeFi Intermediation Chain

Pablo D. Azar, Adrian G. Casillas, and Maryam Farboodi

Digital photo illustration of block chain with 000s and 111s.

Decentralized Finance, or DeFi, is a rapidly growing ecosystem of financial applications built on blockchain technology, primarily on the Ethereum network. These applications aim to recreate traditional financial instruments and services, such as lending, borrowing, trading, and insurance. The DeFi intermediation chain connects a series of intermediaries who find arbitrage opportunities, aggregate transactions into blocks, validate these blocks, and ultimately append them to the blockchain. In this post, we summarize results from our staff report describing how arbitrage opportunities arise in the Ethereum blockchain, and how the need to keep these arbitrage opportunities private gives rise to the intermediation chain.

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Posted at 7:00 am in Cryptocurrencies, Nonbank (NBFI) | Permalink

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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

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