POL Finance
by Agustin Munoz Gonzalez · 5 min
At POL we study DeFi market structure, and this post is part of that ongoing research. The mechanisms and numbers are sourced from public data and the teams’ own docs. Given the buzz PropAMMs have picked up, I’m going to borrow a few minutes of your time (I’ll pay you back with…
POL Finance
by Agustin Munoz Gonzalez · 6 min
The DeFi universe is confusing. When I first started reading about this stuff, I had a hard time sorting out what kinds of platforms even exist. Why would I ever leave the comfort of Binance? This post is the map I wish I’d had back then. It’s current as of today, but like any…
by Agustin Munoz Gonzalez · 20 min
Decentralized exchanges (DEXes) are the lifeblood of DeFi, but not all DEXes play the same role. Two notable models have emerged in the stablecoin trading arena: Curve - the long-standing stablecoin liquidity pioneer , and Fluid – a newer capital-efficient upstart . Both aim to…
Risk
by Dipa · 3 min
Collateralized Debt Positions (CDPs) are the backbone of many DeFi lending and stablecoin systems, such as Sky’s USDS. They allow users to borrow against crypto collateral while keeping their exposure to the underlying asset. To protect solvency, protocols impose…
Tokenomics
by Dipa · 4 min
When Ethereum adopted EIP-1559, it changed not only the economics of transaction fees but also the way researchers describe them. Instead of talking about “gas auctions,” the mechanism can be understood through three simple building blocks: allocation, payment, and distribution…
Tokenomics
by Dipa · 5 min
In Proof-of-Stake (PoS), the mix of cash-flows—burned base fees, validator tips & MEV, and net issuance—determines who gets paid (stakers vs. non-stakers), how volatile those payments are, and how much risk compensation the token demands. We: 1. write an accounting identity that…
by Agustin Munoz Gonzalez · 6 min
Introduction: From Theory Breakdown to Smart Workarounds In \[Part I], When the Pool Fights Back (Part I): Modeling Liquidity with Transaction Costs we introduced a more realistic mean field game (MFG) model for decentralized trading, where agents interact with a liquidity pool…
by Agustin Munoz Gonzalez · 5 min
Exploring how a simple tweak such as adding transaction costs turns a tractable mean field game into a complex dance of strategic interaction.
by Agustin Munoz Gonzalez · 7 min
When I first encountered mean field games , I was struck by their elegance: a tool to study strategic behavior among many agents without modeling each one individually. At the time, I was also working on quantitative strategies inside liquidity pools . It didn’t take long to…
by Agustin Munoz Gonzalez · 7 min
Introduction Automated Market Makers (AMMs) have revolutionized decentralized finance (DeFi), enabling permissionless, on-chain token swaps without relying on traditional order books. Among the most widely adopted designs is the Constant Product Market Maker (CPMM) , the engine…
by Agustin Munoz Gonzalez · 8 min
Introduction In DeFi’s short but explosive history, a few architectural innovations have fundamentally reshaped how we allocate capital. Uniswap made market making permissionless. Curve optimized it for stablecoins, assuming 1:1 pegs. Morpho gave lenders the power to choose which…
by Agustin Munoz Gonzalez · 10 min
1. Introduction Agent-Based Modeling (ABM) is an increasingly valuable tool for studying complex decentralized systems, particularly in DeFi, where markets are driven by heterogeneous agents and emergent behavior. At POL Finance, ABMs are a core part of the research methodology…
by Agustin Munoz Gonzalez · 4 min
What Is Impermanent Loss and Why It Matters In decentralized finance (DeFi), liquidity providers (LPs) are the backbone of automated market makers (AMMs) like Uniswap, Balancer, or Sushi. But being an LP comes with a hidden risk: impermanent loss . Impermanent loss happens when…