Crypto and Decentralized Finance Under Stress

The book offers an overview of the main financial and operational risks in cryptocurrency markets and Decentralized Finance. It outlines the role of stablecoins, crypto-investment products, and multi-function ecosystems, highlighting vulnerabilities linked to reserves, leverage, and protocol interdependencies. The book distinguishes traditional risks from those rooted in smart-contract logic, oracle manipulation, governance failures, and cross-chain bridges. An empirical section analyzes attack frequency, stolen amounts, and evolving exploit techniques, showing a shift toward complex schemes using flash loans and oracle distortions. The book also examines mixers and presents the Ronin case. The final chapters discuss technical and governance measures to mitigate risks and provide regulatory recommendations.

Provides readers a structured tool to understand where DeFi vulnerabilities originate Data on hacks and exploits enables readers to assess the real magnitude and evolution of DeFi risk Offers actionable policy and mitigation guidelines to design safer architectures and close regulatory supervision

Autorentext

Luca Barbaro is a Research Fellow at the University of Naples Parthenope, Italy, and a PhD candidate in Computer Science at Sapienza University of Rome, Italy. His research focuses on data science, data mining, and distributed ledger and blockchain technologies, with a particular focus on DeFi applications and process automation. He has been a visiting researcher at Utrecht University, and his work has been published in journals such as Financial Innovation and Information Systems. He has also presented his research at major international conferences, including the CAiSE Conference on Advanced Information Systems Engineering and the International Conference on Business Process Management (BPM). Luca holds a Bachelor’s degree and a Master’s degree in Business Administration from Sapienza University of Rome, as well as a second-level postgraduate Master’s degree in Data Science from the University of Rome Tor Vergata. Daniele Previtali is Associate Professor of Banking & Finance at the Department of Management and Quantitative Studies, University of Naples 'Parthenope' (Italy), and he is Founder and Director of the Napoli Fintech Lab, an open innovation laboratory focused on the prototyping of fintech products and services, as well as on matchmaking with startups. He has been Adjunct Professor at Luiss Guido Carli University and Visiting at NYU and University of Malta. His main research interests include financial innovation, digital transformation models in the banking sector, corporate governance, and financial market efficiency. His research has been published in journals such as the Journal of Banking & Finance, International Review of Financial Analysis, Journal of International Financial Management & Accounting, Journal of International Financial Markets, Institutions & Money, Global Finance Journal, and Finance Research Letters. Daniele holds a Ph.D. in Banking & Finance from University of Rome Tor Vergata, Bachelor’s and a Master’s degree in Finance from Luiss Guido Carli University. Roberto Rosato works at AMINA Bank in Zug (Switzerland), where he is responsible for client coverage within the Relationship Management division, with a focus on wealth management and digital asset solutions for private and institutional clients. Active in crypto since 2016, he has built experience across banks, hedge funds, and startups, with a strong focus on client acquisition, crypto-backed financing solutions, and tokenization projects, including security token offering initiatives for capital raising through ventures such as EQUITO. Roberto holds a Master of Science in Corporate Finance from LUISS Guido Carli University and, through the QTEM program, an additional master’s degree in Finance and Risk Management, with academic experience at Warwick Business School (UK) and Waseda Business School (Japan). His profile is underpinned by a solid background in economics and blockchain management.

Inhalt

Chapter 1. Financial intermediation and trust in DeFi.- Chapter 2. Traditional and specific risks of DeFi.- Chapter 3. DeFi crypto assets: Stablecoins, Crypto Asset Investment Products, and Multifunctional Groups.- Chapter 4. DeFi under stress: statistics on fraudulent events.- Chapter 5. A proposal for a new DeFi risks taxonomy.- Chapter 6. Mixers as risk multipliers in the DeFi ecosystem.- Chapter 7. Implications and policy recommendations.