Bachelor's Thesis Tung Long

A Data Exploration Tool for Novel DeFi-Metrics on the Algorand Blockchain

Abstract

Algorand is a blockchain platform that provides a secure and efficient infrastructure for
building decentralized applications (DApps). The platform uses a pure-proof-of-stake-based
consensus approach that allows for fast and secure transactions with low fees. Algorand has
gained popularity among developers and users due to its speed, security, and scalability.

In this thesis, we aim to analyze the DeFi ecosystem on the Algorand blockchain concerning
the use of decentralized exchanges (DEXs) and available tokens and develop a data exploration
tool for presenting novel DeFi-related metrics based on a few recent studies.

For this purpose, we first attempt to understand Algorand’s ecosystem by analyzing DeFi-
related metrics of the platform provided by the existing block explorer. This would be helpful
for any research that requires a comprehensive overview of Algorand’s DeFi space or a
comparison between this blockchain platform and other developed ones, such as Ethereum,
especially in terms of DeFi protocols. We then explore related research papers to gain a more
profound comprehension of the challenges and interest regarding DeFi in general and extract
valuable metrics that are applicable to further illuminate the intricacies of Algorand’s DeFi
ecosystem.

In the next part, we propose the design and implementation of an interactive data tool to
facilitate the analysis of these metrics. This tool would be useful for traders or researchers
who, for instance, want to have an overview of the MEV landscape or specific DEX activities.

Research Questions

1. What information can be inferred about the DeFi ecosystem on Algorand using the existing tools?
2. What additional DeFi-related metrics could be computed based on existing blockchain literature?
3. What is a minimal viable pipeline to compute and store the metrics?
4. What are the most valuable views for traders and maximal extractable value (MEV) researchers?
   

References

• Chen, J., & Micali, S. (2019). Algorand: A secure and efficient distributed ledger. Theoretical Computer Science, 777, 155-183.
• Micali, S. (2018). Algorand: Scaling Byzantine Agreements for Cryptocurrencies
• Zhou, L., Qin, K., Cully, A., Livshits, B., & Gervais, A. (2021, May). On the just-in-time discovery of profit-generating transactions in defi protocols. In 2021 IEEE Symposium on Security and Privacy (SP) (pp. 919-936). IEEE.
• Schär, F. (2021). Decentralized finance: On blockchain-and smart contract-based financial markets. FRB of St. Louis Review.
• Pourpouneh, M., Nielsen, K., & Ross, O. (2020). Automated market makers (No. 2020/08). IFRO Working Paper.
• Wang, Y. (2020). Automated market makers for decentralized finance (defi). arXiv preprint arXiv:2009.01676.
• P. Xia, H. Wang, B. Gao, W. Su, Z. Yu, X. Luo, C. Zhang, X. Xiao, and G. Xu. “Trade or trick? detecting and characterizing scam tokens on uniswap decentralized exchange”. In: Proceedings of the ACM on Measurement and Analysis of Computing Systems 5.3 (2021)