Florentina SOIMAN : "Risk-Driven Blockchain Optimization: Impact for Financial Markets and Firms"

Co-supervised by Sonia Jimenez-Garcès (CERAG) and Jean-Guillaume Dumas (LJK)
Risk-Driven Blockchain Optimization: Impact for Financial Markets and Firms
This thesis finds its roots in the quite recent and fast pacing world of the Blockchain technology and cryptocurrencies. After ten years of continuous development and innovation, Blockchain is still far from the mainstream adoption. Some specialists identify two important dimensions affecting the way the technology evolves: its novelty and complexity (Lakhani & Iansiti, 2017).
In this context, we propose to analyze two main research issues. The first one concerns the crypto-market and aims to answer the following questions: ‘Can financial risks be triggered by technical vulnerabilities of Blockchain technology?’, ‘If yes, what is the likelihood that this happens?’.  The result of this research are relative to: 1. an identified continuity between the technological risks and financial ones; 2. we propose a way to determine the likelihood of triggering financial risks through technical vulnerabilities.
As a step forward from our initial research issue, we continue our study project, this time by bringing evidence of how technological events may translate into financial ones. We aim to answer to questions such as: ‘Which technological characteristics of the Blockchain have an impact on the financial risk of cryptocurrencies? ‘, ‘How do cryptocurrencies’ financial characteristics react to pure technological events, specific to crypto-market?’. At this point, the results obtained are mixed, as the performance of cryptocurrencies seem to be dependent to the market conditions.
This research project is conceived as a multilevel analysis (shown graphically in the fig. above). To be more precise, the micro-level analysis represents the detailed risk assessment together with the empirical demonstrations, while the macro-level presents the analysis of the crypto-market as a whole, taking into account its stakeholders’ role and their implication.
Our main intention is to make this research not only useful to the existing participants but also to those considering to enter in this market, them being academics or practitioners. A broader knowledge and awareness about the risks and vulnerabilities of this market, could prevent investors from unnecessary loses, diminish the number of low-quality products and increase performance and efficiency overall.
Published on October 18, 2021