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