FA591 Blockchain Technologies & Decentralized Finance

Course Catalog Description

Introduction

The course will introduce concepts of Blockchain technologies as they apply to decentralized finance. The course starts with cryptocurrency and advances the concept of smart contracts as they apply to financial instruments. The course is technical and requires knowledge of programming in Python as well as financial instruments and concepts. Programming in solidity is learned throughout the class. The course discusses risk management concepts, stable coins as well as how regulations may impact the area.

Prerequisite: Technical background from either FE, FA, BI&A, or CS. Basic finance principles acquired through FE620, FA 535 or equivalent. Basic programming skills in Python, FE520 or equivalent.

Campus	Fall	Spring	Summer
On Campus	X	X
Online	X	X

Instructors

Professor	Email
Ivan Bakrac	ibakrac@stevens.edu

More Information

Course Objectives

In this course students will be provided modern tools to understand web3 and blockchain applications. They will understand the differences and similarities between Crypto Decentralized Finance and Centralized Finance capital markets. The students will be capable to use solidity programming to introduce and develop smart contracts. Finally, the students will be capable of understanding principles of token engineering

Course Outcomes

After successful completion of this course, students will be able to:

Understand DeFi & CeFi crypto capital markets
Understand Solidity & smart contract fundamentals
Apply these concepts to design and develop blockchain solutions, token as well as DeFi trading applications

Course Resources

Textbooks

Harvey, Campbell R. and Ramachandran, Ashwin and Santoro, Joseph, DeFi and the Future of Finance, Wiley (2021)
Andreas M. Antonopoulos and Dr. Gavin Wood, Mastering Ethereum, O'Reilly Media, (2019)

Grading

Grading Policies

		Description	Weights
1	Class Participation & Attendance	Students will be graded based on their regular attendance in class and participation in class discussions	5%
2	Homework	Students will have homework related to blockchain architecture design, quantitative aspects and theory behind decentralized finance algorithms along with short coding assignments in solidity.	35%
3	Quizzes	Students will have short quizzes to demonstrate conceptual understanding of blockchain technology applications	20%
4	Final paper and presentation	Students will work in teams to prepare a theory paper that captures an organizational phenomenon.	30% for paper and 10% for presentation

Lecture online

Week	Crypto Learning Topics	Key Financial Applications	Technical Chapters & Quizzes
Week 1	Bitcoin Mechanics	Bitcoin White paper	Bitcoin White paper
Week 2	Ethereum: Decentralized Apps, EVM, and the Ethereum blockchain	Intro to EVM & Ethereum Ethereum, EVM, Smart Contracts	METH: Ch 1,2,13 Ethereum Quiz #1: Bitcoin Fundamentals
Week 3	Introduction to Decentralized Finance	Intro to DeFi DeFi Infrastructure, DeFi Primitives	DEFI: Ch 1, 2, 3 Quiz #2: Ethereum Fundamentals
Week 4	Programming in Solidity & Smart Contracts Fundamentals I	Basics of Smart Contracts & Fundamentals I Life Cycle of Smart Contract, Programming with Solidity, Building a Smart Contract with Solidity	METH: Ch 6,7,8 Solidity Homework #1: DeFi Markets
Week 5	Programming in Solidity & Smart Contracts Fundamentals II	Basics of Smart Contracts & Fundamentals II Smart Contract Security & Audits, Risk Management: Traditional Risk Factors & DeFi Risk Factors	METH: Ch 9 DEFI : Ch7
Week 6	Decentralized Exchanges	DEX Uniswap & Liquidity Providing & Risk Factors	DEFI: Ch 6 Uniswap White Paper Homework # 2: Solidity – Smart Contract Design
Week 7	Staking	Staking Proof of Stake (POS) vs. Bitcoin Mining (POW)	DEFI: Ch 6 METH: Ch 14 Bitcoin Mining Project Progress Update I Quiz #3: Decentralized Exchange
Week 8	Lending	Lending DeFi Lending Strategies, DeFi Interest Rate Models	DEFI: Ch 6 Compound Protocol
Week 9	Scaling the blockchain: Optimistic Rollup, ZK, Other L1s	Scaling Solutions Zk Roll- Ups, Optimistic Roll Ups, Other L1 Solutions	Blockchain Trilemma ZK Solutions Homework # 2: Solidity – Smart Contract Design
Week 10	Crypto Derivatives	Introduction to Crypto DeFi & CeFi Derivatives Protocol Derivatives, OTC Crypto Markets, Arbitrage	DEFI: Ch 6 Project Progress Update II Quiz #4: Scaling Solutions
Week 11	NFTs	Non-Fungible Tokens Introduction to Non-Fungible Tokens	DEFI: Ch 6 TBD Industry Speaker TBD
Week 12	CBDC & Stablecoins	CBDC Introduction to Central Bank Digital Currencies, Stablecoins, DeFi Stablecoins, Algo Stablecoins	DEFI: Ch 3 Maker DAO CBDC Primer Quiz #5: NFT
Week 13	Token Engineering	Token Design & Airdrops Introduction to Token Engineering & ERC Standards	METH: Ch 10 Homework #4: Token Engineering - Stablecoins & Algo Stablecoins
Week 14	Regulation	Regulation Regulatory and Legal Frameworks	SEC Considerations Regulation of Crypto Assets Final Project Due + Presentation

Final Project

The project will focus on the development of a prototypes for Blockchain applications or Decentralized Finance applications , with the final presentation comprising of two presentations, one for the business case with specific financial analytics application that blockchain technology solves, discussing the business and financial applications of the technology, and one to discuss the technological prototype or architecture.

A proof-of-concept should be developed for the project, which is a (not perfectly) working demo of the proposed system to show the technical aspects are capable of functioning. Projects may involve design of blockchain solution, token engineering & airdrop design, and programmable application for decentralized finance using solidity programming language. Examples includes design of blockchain web3 infrastructure (permissioned or permissionless), design of DeFi market applications using solidity or airdrop or token design engineering.

The projects will be done with small teams of no more than three individuals