Leveraged Trading on Blockchain Technology
Johannes Rude Jensen, Victor von Wachter, Omri Ross

TL;DR
This paper explores implementing and integrating a leveraged trading lifecycle on blockchain, demonstrating feasibility but highlighting challenges and proposing propositions for future applications in finance.
Contribution
It introduces a novel artefact for leveraged trading on blockchain, detailing its design, early integration, and implications for traditional financial systems.
Findings
Feasibility of executing leveraged trades on blockchain.
Integration involves multiple compromises.
Proposes three propositions for blockchain-based business processes.
Abstract
We document an ongoing research process towards the implementation and integration of a digital artefact, executing the lifecycle of a leveraged trade with permissionless blockchain technology. By employing core functions of the 'Dai Stablecoin system' deployed on the Ethereum blockchain, we produce the equivalent exposure of a leveraged position while deterministically automating the monitoring and liquidation processes. We demonstrate the implementation and early integration of the artefact into a hardened exchange environment through a microservice utilizing standardized API calls. The early results presented in this paper were produced in collaboration with a team of stakeholders at a hosting organization, a multi-national online brokerage and cryptocurrency exchange. We utilize the design science research methodology (DSR) guiding the design, development, and evaluation of the…
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Taxonomy
TopicsBlockchain Technology Applications and Security · Digital Platforms and Economics · FinTech, Crowdfunding, Digital Finance
