The document summarizes the research agenda and activities of the Bocconi Algorand Fintech Lab. The lab focuses on (1) research, (2) education, and (3) dissemination related to blockchain, decentralized organizations, and crypto financial markets. Current research projects examine the economics of blockchain and law, decentralized organizations, and digital assets. The lab aims to provide an open research infrastructure through its website, wiki, and computing resources. It faces challenges in coordinating faculty research standards with the fast pace of crypto innovation, and balancing specialized crypto curricula with academic quality.
This document discusses non-fungible tokens (NFTs) and their economics. It provides background on the author and their experience in crypto investing and as a co-founder of companies focused on blockchain and NFT art. It outlines some key problems with the current NFT space around scalability, environmental impact, and forking. It then discusses Aorist, the cultural institution the author co-founded, which supports climate-friendly NFT art using the Algorand blockchain. Aorist has worked with numerous renowned artists and facilitated over $5.5 million in NFT sales. In conclusion, it outlines some unique properties of NFTs on Algorand around optional assets and updatable NFT
- The paper analyzes the economics of non-fungible tokens (NFTs) by constructing an NFT market index and studying its properties.
- Using a repeat sales regression method, the analysis finds an average weekly return of 2.5% for the NFT market index, with a volatility of 19.2% and a Sharpe ratio of 0.939.
- The results show some exposure between the NFT market and cryptocurrency markets, but little exposure to traditional asset markets. Various factors like volatility, valuation ratios, and volume show some degree of return predictability in the NFT market.
The document discusses how digital currencies require digital ledgers to record transactions and ownership. It notes that different entities like tech platforms, banks, and blockchains have different approaches to controlling these digital ledgers. Tech platforms in particular have a comparative advantage in providing credit because they can bundle the ledger with other services to gain valuable information and synergies. However, platforms may also exploit their control over the ledger to increase their market power by restricting the movement of tokens and information to other platforms. Effective regulation is needed to promote competition between platforms and prevent market dominance.
This document provides an overview of yield farming and discusses mechanisms, returns, risks and transaction costs. It analyzes historical data from Curve.fi pools, finding average APYs range from 0.5-6% with maximum APYs of 4-40%. Transaction costs averaged $52 but reached over $400. Key risks include smart contract bugs, price volatility, and impermanent loss from providing liquidity versus holding assets.
The document summarizes research on the adoption of decentralized exchanges (DEX) that use automated market makers (AMM). It finds that liquidity providers only deposit funds if the volatility of token exchange rates is low enough, as high volatility exposes them to losses from arbitrage traders. The research proposes a socially optimal pricing curve for AMMs that balances trading costs with incentivizing liquidity provision. Empirical analysis of DEX data supports the findings that deposit inflows decrease with higher volatility and gas prices are higher for more volatile trading pairs.
The document summarizes the research agenda and activities of the Bocconi Algorand Fintech Lab. The lab focuses on (1) research, (2) education, and (3) dissemination related to blockchain, decentralized organizations, and crypto financial markets. Current research projects examine the economics of blockchain and law, decentralized organizations, and digital assets. The lab aims to provide an open research infrastructure through its website, wiki, and computing resources. It faces challenges in coordinating faculty research standards with the fast pace of crypto innovation, and balancing specialized crypto curricula with academic quality.
This document discusses non-fungible tokens (NFTs) and their economics. It provides background on the author and their experience in crypto investing and as a co-founder of companies focused on blockchain and NFT art. It outlines some key problems with the current NFT space around scalability, environmental impact, and forking. It then discusses Aorist, the cultural institution the author co-founded, which supports climate-friendly NFT art using the Algorand blockchain. Aorist has worked with numerous renowned artists and facilitated over $5.5 million in NFT sales. In conclusion, it outlines some unique properties of NFTs on Algorand around optional assets and updatable NFT
- The paper analyzes the economics of non-fungible tokens (NFTs) by constructing an NFT market index and studying its properties.
- Using a repeat sales regression method, the analysis finds an average weekly return of 2.5% for the NFT market index, with a volatility of 19.2% and a Sharpe ratio of 0.939.
- The results show some exposure between the NFT market and cryptocurrency markets, but little exposure to traditional asset markets. Various factors like volatility, valuation ratios, and volume show some degree of return predictability in the NFT market.
The document discusses how digital currencies require digital ledgers to record transactions and ownership. It notes that different entities like tech platforms, banks, and blockchains have different approaches to controlling these digital ledgers. Tech platforms in particular have a comparative advantage in providing credit because they can bundle the ledger with other services to gain valuable information and synergies. However, platforms may also exploit their control over the ledger to increase their market power by restricting the movement of tokens and information to other platforms. Effective regulation is needed to promote competition between platforms and prevent market dominance.
This document provides an overview of yield farming and discusses mechanisms, returns, risks and transaction costs. It analyzes historical data from Curve.fi pools, finding average APYs range from 0.5-6% with maximum APYs of 4-40%. Transaction costs averaged $52 but reached over $400. Key risks include smart contract bugs, price volatility, and impermanent loss from providing liquidity versus holding assets.
The document summarizes research on the adoption of decentralized exchanges (DEX) that use automated market makers (AMM). It finds that liquidity providers only deposit funds if the volatility of token exchange rates is low enough, as high volatility exposes them to losses from arbitrage traders. The research proposes a socially optimal pricing curve for AMMs that balances trading costs with incentivizing liquidity provision. Empirical analysis of DEX data supports the findings that deposit inflows decrease with higher volatility and gas prices are higher for more volatile trading pairs.
The document discusses how blockchain tokens are changing platform economics by addressing old problems like network effects. Utility tokens can help platforms enter the market by eliminating the need for user subsidies upfront. While this moves revenue earlier, overall profits may be lower. Governance tokens could allow for more decentralized and equitable value distribution by users rather than powerful intermediaries. However, each type of token comes with caveats, and does not fully remove traditional economic concerns for platforms.
1) The document discusses the adoption journey of blockchain technologies, focusing on successes and failures. It outlines Dr. Alessio Bonti's background and experience working with emerging technologies at IBM.
2) Bonti describes some of the biggest and smallest problems addressed by early blockchain projects, including reducing paperwork processing time for bank guarantees from 30 days to 1 day.
3) The presentation focuses on using blockchain to promote financial and environmental sustainability through frameworks, indicators, consumer behavior analysis, and incentives that support better decision-making. The Liven cashback app is presented as a case study.
The document discusses central bank digital currencies (CBDCs) based on lessons learned from global CBDC efforts and pilots. It provides an overview of key CBDC concepts and definitions. It then summarizes Accenture's work on three CBDC pilots - an e-Krona pilot with the Swedish central bank exploring a retail CBDC, Project Jura with several central banks exploring cross-border CBDC settlements, and Project Khokha II with the South African central bank exploring CBDC policy implications. The document concludes with a brief outlook on European and global CBDC developments.
This document summarizes the key points from the final session of a blockchain solution designer course. It discusses how to build a decentralized application (Dapp) that allows users to mint and transfer non-fungible tokens (NFTs) representing images. The session explains how to set up a Dapp development environment, connect it to an account, write a smart contract to create NFTs, upload images to IPFS, and include functionality for minting, viewing, and transferring NFTs between wallets. By the end of the session, participants will have developed a complete Dapp that implements these core capabilities for creating and managing NFTs on a blockchain network.
The document provides an overview of consensus protocols in blockchain technology. It discusses that consensus protocols ensure blockchain networks function as expected in a decentralized manner by controlling the network and ensuring consistency even if some nodes act maliciously. It then describes two prominent consensus protocols: proof of work (PoW) and proof of stake (PoS). PoW requires nodes to solve cryptographic puzzles to validate blocks, while PoS requires nodes to stake cryptocurrency and attest to blocks' validity. The document also notes there is no single best consensus protocol and the suitable solution depends on one's needs and goals.
The document provides an overview of smart contracts including:
- Defining smart contracts as computational programs on blockchain that can be executed based on defined logics.
- Explaining the key concepts of immutability, determinism, and blockchain context in relation to smart contracts.
- Describing the lifecycle of smart contracts from development to execution.
- Emphasizing the importance of security best practices like minimalism, code quality, and testing when developing smart contracts.
- Outlining the steps taken in the practical session to connect a blockchain account to a decentralized application, including installing requirements, updating app code, and connecting the account.
This document provides an introduction and overview of key blockchain concepts for developers, including accounts, wallets, transactions, test networks, blockchain clients, and decentralization. It begins with definitions of blockchain accounts, wallets, and transactions. It then discusses the purpose of test networks for blockchain development. It also defines blockchain clients and remote clients and their roles in interacting with blockchain networks. Finally, it discusses the importance of decentralization for blockchains. The document is presented as part of a blockchain solution designer course to provide essential background information for learning blockchain development.
The document discusses how blockchain tokens are changing platform economics by addressing old problems like network effects. Utility tokens can help platforms enter the market by eliminating the need for user subsidies upfront. While this moves revenue earlier, overall profits may be lower. Governance tokens could allow for more decentralized and equitable value distribution by users rather than powerful intermediaries. However, each type of token comes with caveats, and does not fully remove traditional economic concerns for platforms.
1) The document discusses the adoption journey of blockchain technologies, focusing on successes and failures. It outlines Dr. Alessio Bonti's background and experience working with emerging technologies at IBM.
2) Bonti describes some of the biggest and smallest problems addressed by early blockchain projects, including reducing paperwork processing time for bank guarantees from 30 days to 1 day.
3) The presentation focuses on using blockchain to promote financial and environmental sustainability through frameworks, indicators, consumer behavior analysis, and incentives that support better decision-making. The Liven cashback app is presented as a case study.
The document discusses central bank digital currencies (CBDCs) based on lessons learned from global CBDC efforts and pilots. It provides an overview of key CBDC concepts and definitions. It then summarizes Accenture's work on three CBDC pilots - an e-Krona pilot with the Swedish central bank exploring a retail CBDC, Project Jura with several central banks exploring cross-border CBDC settlements, and Project Khokha II with the South African central bank exploring CBDC policy implications. The document concludes with a brief outlook on European and global CBDC developments.
This document summarizes the key points from the final session of a blockchain solution designer course. It discusses how to build a decentralized application (Dapp) that allows users to mint and transfer non-fungible tokens (NFTs) representing images. The session explains how to set up a Dapp development environment, connect it to an account, write a smart contract to create NFTs, upload images to IPFS, and include functionality for minting, viewing, and transferring NFTs between wallets. By the end of the session, participants will have developed a complete Dapp that implements these core capabilities for creating and managing NFTs on a blockchain network.
The document provides an overview of consensus protocols in blockchain technology. It discusses that consensus protocols ensure blockchain networks function as expected in a decentralized manner by controlling the network and ensuring consistency even if some nodes act maliciously. It then describes two prominent consensus protocols: proof of work (PoW) and proof of stake (PoS). PoW requires nodes to solve cryptographic puzzles to validate blocks, while PoS requires nodes to stake cryptocurrency and attest to blocks' validity. The document also notes there is no single best consensus protocol and the suitable solution depends on one's needs and goals.
The document provides an overview of smart contracts including:
- Defining smart contracts as computational programs on blockchain that can be executed based on defined logics.
- Explaining the key concepts of immutability, determinism, and blockchain context in relation to smart contracts.
- Describing the lifecycle of smart contracts from development to execution.
- Emphasizing the importance of security best practices like minimalism, code quality, and testing when developing smart contracts.
- Outlining the steps taken in the practical session to connect a blockchain account to a decentralized application, including installing requirements, updating app code, and connecting the account.
This document provides an introduction and overview of key blockchain concepts for developers, including accounts, wallets, transactions, test networks, blockchain clients, and decentralization. It begins with definitions of blockchain accounts, wallets, and transactions. It then discusses the purpose of test networks for blockchain development. It also defines blockchain clients and remote clients and their roles in interacting with blockchain networks. Finally, it discusses the importance of decentralization for blockchains. The document is presented as part of a blockchain solution designer course to provide essential background information for learning blockchain development.
2. ZeroLAB
ZeroLAB
Welcome! I am Alessio and my team and I are behind this course.
We are thrilled to have you here. This is a 6 parts introduction to Blockchain, from theperspective of Solutions
designers.
No coding experience is required, but if you want to continue, it might comein handy.
During this course you will learn the theory behind Blockchain and why it is such a fundamental in modern business
networks, and a great opportunity for young entrepreneurs.
You will alsobuild a full Dapp to connect your wallet and create NFTs.
We hope you will enjoy this material!
Dr. Alessio Bonti
I N T R O
3. ZeroLAB
ZeroLAB
T H E B L O C K C H A I N T E A M
D r . A l e s s i o B o n t i
S o l u t i o n
A r c h i t e c t I B M
M a n a g e r
J a s o n P h a m
P h D C a n d i d a t e @
D e a k i n U n i
T e c h L e a d
E m i l y C h i n
B / A @ D e a k i n
U n i
B u s i n e s s L e a d
The ZeroLab mission is to leave the planet in a
better state than we found it.
It is led by industry hardened individuals and
awarded academics that want to make a
difference.
7. ZeroLAB
ZeroLAB
Business Networks benefit from connectivity
• Participants are customers, suppliers,
banks, partners
• Cross geography & regulatory boundary
Wealth is generated by theflow of
goods & services across business
network in transactions and contracts
Markets are central to this process:
• Public(fruit market, car auction), or
• Private (supplychain financing,bonds)
B U S I N E S S A N D M A R K E T
8. ZeroLAB
ZeroLAB
Value is generatedwhen assets are transferred.
Anything that is capable of being owned or
controlled to produce value, is an asset.
We have two fundamental types of assets.
Tangible andIntangible.
A S S E T S
Tangible assets are simple,likehouses, or a car. They exist
physically.
This Photo by Unknown Author is licensed under CC BY-SA
Intangible assets can be :
• Financial ,egbonds
• Intellectual ,eg patents
• Digital ,eg music or videos
9. ZeroLAB
ZeroLAB
For hundreds ofyears, business and markets kept on runningonmore or less modern Ledgers . Whether this was electronic or onpaper, it has not
changed much.
Each business wouldown its own ledger.
An asset wouldbe transferred into or out of the ledgerthrough a transaction. For example,Alexsells Bob a car.
Contracts are rules that specify how these transactions happen.For example,a sale contract wouldexpect Bobto payAlexfor the car, and Alex
passing the ownershipof the car oncethe payment is made.
L E D G E R S , T R A N S A C T I O N S A N D C O N T R A C T S
Blockchain is thefirst real attempt at breaking the hundreds years old ledger system.
10. ZeroLAB
What is a blockchain - “A system in which a record of transactions made in bitcoin
or another cryptocurrency are maintained across several computers that are linked in
a peer-to-peer network.”
By the Oxford Language Dictionary
D E F I N I T I O N
11. ZeroLAB
What is a blockchain = “That crappy database you use when
you don’t trust anyone”
By Awesome Stranger atBlockchain Meetup
D E F I N I T I O N V 2
12. ZeroLAB
Any typical day, this is what the
business network is aiming to
achieve. The whole system is
inefficient,expensive and
vulnerable.
R E A L W O R L D S C E N A R I O
Bankrecords
Insurance
records
Regulator
records
Auditor
records
Participant A
records
Participant B
records
13. ZeroLAB
Blockchain solves this problem through
the use of one Shared andReplicated
ledger with consensus, provenance,
immutabilityandfinality.
R E A L W O R L D S C E N A R I O
Bankrecords
Insurance
records
Regulator
records
Auditor
records
Participant A
records
Participant B
records
14. ZeroLAB
ZeroLAB
A brief history of theevolution
of blockchain.
B L O C K C H B A I N T I M E L I N E
1990 The theoretical works of
blockchain
Conceptual and theoretical works
regarding a “time-stamp digital
document” were conducted in
1991 by Stuart Haber and Scott
Stornetta.
2009 ETHEREUM 1.0
The first blockchain platform that
introduces the smart contract
concept
2008 BITCOIN
The first blockchainplatform built
by Satoshi Nakamoto.
2022 MORE THAN 1000
BLOCKCHAIN PLATFORMS
The transaction volume reached
the peak in Q2 2021 at
approximately $4 trillion.
Blockchaintechnology use also
explodes.
16. ZeroLAB
ZeroLAB
A blockchain takes the name by being a chain ofblocks.
What makes it special is the fact that every block holds the knowledge of the previous one,this structure
allows it to be very secure because not one singlePREVIOUS block can be modified withoutaltering the
following one.
W H A T I S A B L O C K ?
17. ZeroLAB
ZeroLAB
We can say the block holds “the history” of the entire
blockchain.
• Every block holds the hash of its own block and the hash of the previous
block.
• The hash represents the block and all of its contents, if any of the
contents within the block is changed, the hash value will change.
• This hash value is always unique (no other hash in the blockchain will be
the same).
T H E B L O C K I N D E T A I L S
19. ZeroLAB
Blockchain offers the following characteristics which
directly enables it to provide sought after features.
Immutability
Transparency
Traceability
Security
Decentralization
B L O C K C H A I N F E A T U R E S
20. ZeroLAB
The ability of temper proof
certaintyof past transactions
without the fear of arguments
about states is thekey of any
dispute especially inauditing.
I M M U T A B I L I T Y
21. ZeroLAB
Every transaction on a blockchain
is recorded and visiblefor anyone
to see. You may not know who
exactly, butyou can be certain of
the what.
T R A N S P A R E N C Y
22. ZeroLAB
The ability to track every
transactionfrom the genesis of the
blockchain until now makes it
suitablefor all supply chain
applications.
T R A C E A B I L I T Y
23. ZeroLAB
The true heart of any blockchain, the ability
to not be controlled by any one node. This
is one of the most important, which is also
the most sought after feature, as it allows
for new types of businesses to exist. No
government control.
D E C E N T R A L I Z A T I O N
25. ZeroLAB
ZeroLAB
Since the first inception or theBitcoin network,
Blockchain has vastly evolved with different
network topology and different consensus models
depending onthe use case. The world of trust is a
complex one, beingin a distributed networkwhere
trust is enforcedand everyoneis anonymous may
notactually be goodfor business.
T O P O L O G I E S
Blockchain has 3 main topologies.
Public
Private
Hybrid
There is not a one solution fits all as of
one, especially given that blockchain has
developed into thousands of different
implementations.
26. ZeroLAB
ZeroLAB
Public blockchainsarethe purest implementationof theoriginal
idea.
Most publicblockchainsare the effort ofprivateentities,after
Bitcoin andEthereum,there arenow more than 1000 platforms.
Although the publicnature has creatednot small headachesin
the community, ithas also allowedfor aflourishing of new
technologies.
By defaultBlockchainscannottalk to eachother,bridgesare
createdto makethis happen.
P U B L I C
Characteristics:
• Open to join.
• Incentive-based consensusmechanism ->
cryptocurrency.
• Data and transaction on chain are available to
everyone.
• High decentralization.
Bitcoin,Ethereum and Algorand are examples of public
blockchains
27. ZeroLAB
ZeroLAB
Private blockchains, also known as DLTs
(Distributed Ledger Tech) are the realm of
corporates and specific business.
In DLTs, there is no “hiding”, it is more of a
consortium state, meaning that trust in the real
world must exist. For examples, banks are well
knownto use DLTs for some of their services.
P R I V A T E
Characteristics:
• Only invited entities can join.
• Cryptocurrency-free consensus.
• Governed by one or a group of organization(s).
• Data and transactions on chain are available to authorized
participants only.
DLTs are not as straightforward, andit is sometimes complex to
understand the business use cases because it is about creating complex
business networks andinteractions.
The most well known DLTs are Quorum and Hyperledger
(IBM/Linux)
29. ZeroLAB
ZeroLAB
Throughoutthis course we will buildand deploy a
fullDapp (decentralized app) usingAlgorand.
This Dappwill allow youto create your own NFTs
outof images!
This is just the beginning;theworld’s problems are
yours to solve!
L E A R N T O B U I L D D A P P S
Topics
1. Create and fundyour account with testnet funds.
2. Setup your development environment.
3. Connect account to a Dapp.
4. Write a simple smart contract, deploy and test.
5. Upload images to IPFS through a Dapp.
6. Create NFT on the Dapp and transfer using your
wallet.
By the endof the 6th chapter, youwillhave a sound
understanding ofhow to create a Decentralized application
and how to get it working inreal life.
30. ZeroLAB
ZeroLAB
This is the start of the journeyto build our cool
Dapp.
By theend ofthis session, we will havetwo
blockchain accounts in a wallet which are
funded with test cryptocurrencies.
P R A C T I C A L J O U R N E Y
Topics
1. Create and fundyour account with testnet funds.
2. Setup your development environment.
3. Connect account to a Dapp.
4. Write a simple smart contract, deploy and test.
5. Upload images to IPFS through a Dapp.
6. Create NFT on the Dapp and transfer using your
wallet.
32. ZeroLAB
ZeroLAB
Inthis practical session, we will use ablockchain wallet to create some accounts.
Blockchain wallet is a digital wallet that holds cryptocurrencies, tokens and enables users to manage
them easily.
Account is a cryptographictool that enables users to securely and anonymously interact withthe
blockchain network.
B L O C K C H A I N W A L L E T
Blockchain wallet and account will bebetter explained in the next session.
33. ZeroLAB
ZeroLAB
We will use a mobile wallet called Pera Algo
Wallet to manage our accounts and hold our
funds.
Let’s download the app to your smartphones!
D O W N L O A D P E R A A L G O W A L L E T
App Store (iOS)
Play Store (Android)
34. ZeroLAB
ZeroLAB
After the app is downloaded and installed, we
can go ahead and create 2 accounts.
*Note: when you are asked to record the 25
mnemonic words, make sure you write them
downin the exact provided order (or you
can just take a screenshot which is nota good
practice but is quick and easy)
C R E A T E A C C O U N T S
35. ZeroLAB
ZeroLAB
For testing purposes, we need to change wallet
setting to connect to the Algorand Testnet.
This will help avoid cost when we do testing as
cryptocurrencies on testnets are free.
C H A N G E C O N N E C T I O N T O T E S T N E T
36. ZeroLAB
ZeroLAB
From the bottom navigation menu:
Select “Settings”
Select “Developer Settings”
Select “Node Settings”
Choose “TestNet”
Make sure the colour of the app bar on the
topchanges to orange.
C H A N G E C O N N E C T I O N T O T E S T N E T
37. ZeroLAB
ZeroLAB
Until this stage, we should have 2 accounts
created. However, they do not have any
ALGOs which are essential for our future
testings.
So, let’s fund them! We will start with copying
Account 1 address by tap and hold on
Account 1 > “Copy Address”
F U N D A C C O U N T
40. ZeroLAB
ZeroLAB
The Account2 also needsto
be funded.So,we will send
5 ALGOs fromAccount 1 to
it:
“Send”
“Account1
“Algo”
Enter 5 > “Next”
“Account2”
“Send”.
S E N D A L G O S
41. ZeroLAB
ZeroLAB
After the transaction is
successfully executed,we
can check iton
AlgoExplorer:
Select either “Account
1” or “Account2”
Tap on “History” tab
Selectthe transaction
with 5 ALGOs.
Select “Open in
AlgoExplorer”at the
bottom.
T R A N S A C T I O N D E T A I L S
43. ZeroLAB
ZeroLAB
Finally, we have 2 funded accounts which are
super useful for the coming practical sessions.
F U N D E D A C C O U N T S
44. ZeroLAB
We have done our firstpractical session where we learn how to create accounts in
Pera Algo Wallet, fund them withtest ALGOs and transfer test ALGOs from one
account to another.
In the nextpractical session, we will setup a development environment with the
Algorand sandbox.
P R A C T I C A L 1