We analyze the competitive dynamics between a decentralized financial system, called a protocol for loanable funds (PLF), and a centralized financial system. A PLF primarily differs from traditional banks in terms of its purpose and its decentralized ledger. While traditional banks pursue profit maximization, the PLF with a decentralized ledger system liquidates borrowing demand in line with the supply of deposits. We provide a theoretical framework that incorporates the differences among the lending markets to outline their competitive dynamics and suggest an optimal design for the PLF's consensus algorithm. The traditional bank incurs a cost to secure market power that depends on its degree of heterogeneity from the PLF. Our results suggest channels through which monetary policy influences the interest rates of PLFs.

中文翻译：

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去中心化和集中式金融借贷市场之间的竞争动态


我们分析了去中心化金融系统（称为可借贷资金协议 （PLF））与中心化金融系统之间的竞争动态。PLF 主要区别在于其目的和去中心化账本。传统银行追求利润最大化，而采用去中心化账本系统的 PLF 则根据存款供应来清算借款需求。我们提供了一个理论框架，该框架结合了借贷市场之间的差异，以概述它们的竞争动态，并为 PLF 的共识算法提出最佳设计。传统银行需要付出一定的成本来确保市场力量，这取决于它与 PLF 的异质性程度。我们的结果表明，货币政策通过哪些渠道影响 PLF 的利率。