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Arguably Adequate Aqueduct Algorithm: Crossing A Bridge-Less Block-Chain Chasm

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  • Kashyap, Ravi

Abstract

We consider the problem of being a cross-chain wealth management platform with deposits, redemptions and investment assets across multiple networks. We discuss the need for blockchain bridges to facilitates fund flows across platforms. We point out several issues with existing bridges. We develop an algorithm – tailored to overcome current constraints – that dynamically changes the utilization of bridge capacities and hence the amounts to be transferred across networks. We illustrate several scenarios using numerical simulations.

Suggested Citation

  • Kashyap, Ravi, 2023. "Arguably Adequate Aqueduct Algorithm: Crossing A Bridge-Less Block-Chain Chasm," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007936
    DOI: 10.1016/j.frl.2023.104421
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    References listed on IDEAS

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    1. Jason Scharfman, 2023. "Decentralized Finance (DeFi) Fraud and Hacks: Part 1," Springer Books, in: The Cryptocurrency and Digital Asset Fraud Casebook, chapter 0, pages 81-95, Springer.
    2. Cynthia Weiyi Cai, 2018. "Disruption of financial intermediation by FinTech: a review on crowdfunding and blockchain," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 58(4), pages 965-992, December.
    3. Liu, Weiyi, 2019. "Portfolio diversification across cryptocurrencies," Finance Research Letters, Elsevier, vol. 29(C), pages 200-205.
    4. Agarwal, Vikas & Boyson, Nicole M. & Naik, Narayan Y., 2009. "Hedge Funds for Retail Investors? An Examination of Hedged Mutual Funds," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 44(2), pages 273-305, April.
    5. Jason Scharfman, 2023. "Decentralized Finance (DeFi) Fraud and Hacks: Part 2," Springer Books, in: The Cryptocurrency and Digital Asset Fraud Casebook, chapter 0, pages 97-110, Springer.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ravi Kashyap, 2023. "DeFi Security: Turning The Weakest Link Into The Strongest Attraction," Papers 2312.00033, arXiv.org.

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    More about this item

    Keywords

    Crypto; Cash; Bridge; Blockchain; Wealth management; Decentralized; Algorithm; Risk; Diversification; Numerical simulation;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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