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Foundations of Fiat-Denominated Loans Collateralized by Cryptocurrencies

Authors Pavel Hubáček , Jan Václavek, Michelle Yeo

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LIPIcs.OPODIS.2025.6.pdf
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Subject Classification

ACM Subject Classification
  • Applied computing → Electronic commerce
  • Applied computing → Economics
Keywords
  • Blockchains
  • Cryptocurrencies
  • DeFi
  • Loans
  • Mechanism design
  • Subgame Perfect Equilibrium
  • Rational analysis

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Abstract

The rising importance of cryptocurrencies as financial assets pushed their applicability from an object of speculation closer to standard financial instruments such as loans. In this work, we initiate the study of secure protocols that enable fiat-denominated loans collateralized by cryptocurrencies such as Bitcoin. We provide limited-custodial protocols for such loans relying only on trusted arbitration and provide their game-theoretical analysis. We also highlight various interesting directions for future research.

Cite As Get BibTex

Pavel Hubáček, Jan Václavek, and Michelle Yeo. Foundations of Fiat-Denominated Loans Collateralized by Cryptocurrencies. In 29th International Conference on Principles of Distributed Systems (OPODIS 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 361, pp. 6:1-6:18, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025) https://doi.org/10.4230/LIPIcs.OPODIS.2025.6

Author Details

Pavel Hubáček
  • Institute of Mathematics, Czech Academy of Sciences, Prague, Czech Republic
  • Charles University, Faculty of Mathematics and Physics, Prague, Czech Republic
Jan Václavek
  • Firefish, Prague, Czech Republic
Michelle Yeo
  • National University of Singapore, Singapore

Funding

  • Hubáček, Pavel: Partially supported by the Academy of Sciences of the Czech Republic (RVO 67985840) and Czech Science Foundation GAČR grant No. 25-16311S.
  • Yeo, Michelle: Supported by MOE-T2EP20122-0014 (Data-Driven Distributed Algorithms).

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