defi-assets.md

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true	en-EN	DeFi Assets Intro	Introduction to Cryptoassets, Stablecoins, Tokenization	minimal	fade	true	false

Cryptoassets, Stablecoins, Tokenization

Continuing Education Course

Dr. Nils Bundi

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Dr. Nils Bundi

Founder Vesu Lending President DeFi Collective Lecturer ZHAW School of Engineering

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Cryptoassets make headlines

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FINMA on cryptoassets

Cryptoassets are digital assets that are usually recorded on a blockchain. They differ from other assets because they can only be accessed using cryptography. As a rule, a pair of keys is used, consisting of a secret private key and a public key

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Cryptoassets market

10k Tokens	$2.3t MCAP
$91b Volume (24h)	813m Token Holders

Covers "active" tokens according to CoinMarketCap/Token Terminal.

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Market capitalization

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Capitalization by asset

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Token classification

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Token implementation

	Native Token	Fungible Token	Non-Fungible Token
Implement-ation	Embedded in blockchain	Smart Contract	Smart Contract
Standards	-	ERC-20	ERC-721
Functionality	Transfer, pay tx fees, staking	Programmable with all sorts of functionality	Programmable with all sorts of functionality
Examples	BTC, ETH	USDC, vUSDC, UNI, vault shares, LPs	CryptoPunks, BAYC, Beeple's "Everydays", Uniswap-v3 LPs

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Example: ERC-20 Token (incomplete)

contract ERC20 {
    mapping(address account => uint256) private _balances;
    uint256 private _totalSupply;
    string private _name;
    string private _symbol;

    function balanceOf(address account) public view virtual returns (uint256) {
        return _balances[account];
    }
    function transfer(address to, uint256 value) public virtual returns (bool) {
        address owner = _msgSender();
        _balances[owner] -= value;
        _balances[to] += value;
        return true;
    }

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Stablecoins

• Tokens that are pegged to the price of another asset
  • Circle's EURC $\approx$ 1 EUR
  • Liquity's LUSD $\approx$ 1 USD
  • Synthetix' sETH $\approx$ 1 ETH
• Different Peg-Mechanisms
  • 100% backed by Fiat/Treasuries (CeFi)
  • >100% backed by cryptoassets (DeFi)
  • Algorithmic or only partially backed (DeFi)

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Stablecoin landscape

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Stablecoin Trilemma

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Example: USDC

• USD Stablecoin issued by Circle
• 100% backing through "Cash and Cash Equivalents"
• $36b MCAP
• Widely used across DeFi, often used as a proxy for USD

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Example: Depeg

• USDC is NOT USD
• Depeg in March 2023
• Triggered by collapse of Silicon Valley Bank
• SVB custodies some $3.3b USD for Circle
• "Bank run" as a reaction
• Understand risks!

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Top 8 stablecoins

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Asset tokenization

• Tokenization of "any" assets (similar to FIAT-backed stablecoins)
• Generally involves
  • Legal structure: SPV or similar owning the ("real-world") assets
  • Primary market: Emission of token with claim on SPV assets
  • Secondary market: Trading of token (e.g. through DEX)
• Underlying assets are custodied by centralized custodian (CeFi)
• Can often be freely traded and used across DeFi (DEX, lending, etc.)
• Examples: Paxos Gold, Tokenized treasuries, real-estate, etc.

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Tokenizing public securities

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Tokenized treasuries products

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Tokenized treasuries market

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Tokens - DeFi's foundation

• Cryptoassets build the foundation of any DeFi service (DEX, lending,etc)
• Open and programmable interfaces enable DeFi protocols
• Settlement on public blockchain

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Thank you!

@nilsbundi
Nils Bundi
@nbundi