Decentralized Finance (DeFi) Laboratory

The Decentralized Finance (DeFi) Laboratory is housed in the Haskayne School of Business at the University of Calgary. The Haskayne DeFi Lab aims to be a hub for finance research and innovation, education and experiential learning, and community-building. It acts as a platform to connect researchers and students with the financial services industry, policy-makers, community partners and DeFi entrepreneurs.


The advent of decentralized finance, known as DeFi, represents a revolution in financial services, using cryptocurrency and blockchain technology to manage financial transactions. DeFi has the potential to replace legacy, centralized institutions with new peer-to-peer, decentralized relationships that provide a full range of financial services — from everyday banking, to loans and mortgages, to complex contract-based relationships, to asset trading. Decentralization effectively eliminates the need for a middleman or gatekeeper to manage the system, allowing parties on the same blockchain to interact directly with each other.

DeFi is an emerging field that has not seen long or widespread use and thus comes with many unknowns and risks. The goal of the Haskayne DeFi Lab is to understand the potential and pitfalls associated with these new technologies, and develop both the tools and talent needed to advance and take advantage of the great potential of decentralized finance.

Research and Innovation

Research and Innovation

Haskayne DeFi Lab research covers a wide range of topics related to the innovative technologies behind blockchains and cryptocurrencies, including decentralized exchanges, mining fees, price differentials and design problems for decentralized platforms. The lab also contributes to the Bank of Canada’s “Model X” challenge, actively investigating designs, use cases, models and policy questions around the creation of a Central Bank Digital Currency (CBDC) for Canada.

Education and Experiential Learning

Education and Experiential Learning

Professors in the Haskayne DeFi Lab are actively engaged in educating the next generation of DeFi professionals and academics. Training is available at both the undergraduate and graduate levels to advance the knowledge and qualifications of students interested in blockchain and distributed ledger technologies. Trainees benefit from involvement in projects focused on real-world applications of DeFi, such as the Bank of Canada CBDC project.

Community Building


The Haskayne DeFi Lab is committed to conducting independent research and contributing novel understanding into the science and technologies surrounding decentralized finance. Insights into these disruptive technologies will be made available for the benefit of other academics, as well as for the benefit of DeFi financial service providers, policy-makers, community partners and society at large.


The DeFi Lab at the Haskayne School of Business is led by Dr. Alfred Lehar. The lab brings together University of Calgary faculty with undergraduate, Master’s, PhD and DBA students that are interested in cryptocurrencies, with a particular focus on the decentralization made possible by using smart contracts on a blockchain. The Haskayne DeFi lab is also enhanced by established academic collaborations both within and external to the University of Calgary.

Dr. Alfred Lehar, PhD (Academic Director), Associate Professor of Finance, Haskayne School of Business, University of Calgary

Alfred Lehar is an associate professor of finance at the Haskayne School of Business at the University of Calgary. His areas of research interest include FinTech, bank regulation, financial stability and corporate finance. He is currently researching mining fees and price differentials in Bitcoin markets, decentralized exchanges, and under what conditions renegotiations can facilitate a private sector workout of a financial crisis. He also works on how information produced by financial markets can be optimally used in bank regulation. In his previous research he developed several methods on how to measure the probability of a financial crisis, analyzed conflicts of interest for financial analysts, and looked at the empirical fit of alternative option pricing models.


Dr. Kyoung Jin (KJ) Choi, PhD, Associate Professor of Finance, Haskayne School of Business, University of Calgary

Kyoung Jin (KJ) Choi is an associate professor of finance at the Haskayne School of Business at the University of Calgary. He currently teaches FNCE 445 (Futures and Options) AND FNCE 559 FinTech at the undergraduate level, FNCE 789 FinTech for the MBA program, and FNCE 799.07 (Topics in Corporate Finance and Asset Pricing) at the graduate level. His research interests include investment, real options, dynamic contracting and FinTech.

Dr. Christine Parlour, PhD, Professor and Sylvan C. Coleman Chair in Finance and Accounting, Haas School of Business, University of California, Berkeley

Christine A. Parlour is the Sylvan C. Coleman Chair of Finance and Accounting at Berkeley Haas. Most of her work is in institutionally complex areas, such as market microstructure and banking. Her current work focuses on changes in the payments system and the effects on bank balance sheets. She has written for major finance and economics journals. She has been on the NASDAQ Economic Advisory Board and is currently on the steering committee for the New Special Study of Securities Markets.

Arian Haghighat:
Arian Haghighat is a student at the University of Calgary, pursuing a finance degree (BComm) with an embedded certificate in entrepreneurship. He has been working with Dr. Lehar since 2023 as a DeFi researcher.

Georgino Issak:
Georgino Issak is a student at the University of Calgary currently pursuing degrees in Finance (BComm) and Computer Science (BSc). He has been collaborating with Dr. Lehar as a DeFi research assistant since 2023.

Jaime Castillo Leon:
Jaime Castillo Leon is a second-year PhD student of finance at the University of Calgary. He was a member of the team that won the Business Creativity Award in the Banking, Financial, and Insurance Services category for creating the first human capital investment fund in Peru. As a former CTO of a financial company, his interest in technology and finance led him to specialize in FinTech. He is currently studying bridges and systemic risk in DeFi markets.

Motahhareh Moravvej:
Motahhareh (Moty) Moravvej is a PhD student and a graduate research assistant in the Finance area at the Haskayne School of Business, University of Calgary. Her current research area is in FinTech, specifically on blockchain technologies. With her professional background in the capital markets, she is also interested in trade engine and post-trade systems, clearing and settlement systems, market linkage projects and modern asset pricing.

Behnoud Alizadeh Bazrafshan:
Behnoud Alizadeh Bazrafshan is a Finance PhD Student at the Haskayne School of Business, University of Calgary. His main research interests are Financial Technology (FinTech) and Market Microstructure. Behnoud's current research focuses on wash trading in decentralized exchanges.

Ryan Stauffer:
Position: Assistant Professor of Finance and Perricelli Faculty Fellow, Bucknell University
Status: Alumnus, Haskayne School of Business PhD Program (2013 – 2020), University of Calgary

Brandon Rochon:
Brandon Rochon is an alumnus of the University of Calgary, with a dual degree in mechanical engineering (BSc) and business (finance) (BComm) (2016–2021). He currently holds a position of Data Scientist at Covalent. He has been working in the Haskayne DeFi Lab since January 2021, studying loan liquidations in DeFi and building data infrastructure for the DeFi Lab.

Dylan Rae:
Dylan Rae is a student at the University of Calgary who is pursuing degrees in electrical engineering and finance. He has been a FinTech Research Assistant at the Haskayne School of Business since September 2021.

Willie Li:
Willie Li is an alumnus of the University of Calgary, with degrees in software engineering and business (finance) (2022). He primarily performs data analytics and writes programs in the DeFi lab. He has been working with Dr. Lehar since September 2021 as a DeFi researcher.

FinTech Learning

FinTech courses

FNCE 481 FinTech: Links conventional finance theory to FinTech—new technological innovations and their applications in finance. Topics include blockchain, cryptocurrency, smart contracts, crowdfunding, initial coin offerings (ICOs), machine learning and other current topics.

Level: Senior-level course for undergraduate BComm students

FNCE 631 FinTech: An understanding of fast-moving recent technological improvements in various industries and how they change conventional thinking and trading in the banking and finance industries.

Level: MBA-level elective course

FNCE 559.9 Decentralized Finance: Finance is undergoing a revolution with the arrival of blockchain technology and smart contracts. Decentralized Finance (DeFi) is an ecosystem of smart contracts that allow token trading, lending, investing (yield farming), and the handling of non-fungible tokens (NFTs). New innovations arrive constantly, reflecting the growth of DeFi from zero to tens of billions of dollars in the last three years. The underlying technology will have a huge impact on finance. This class delivers the frontier of knowledge in this space.

Level:  Senior-level course for undergraduate BComm students

FinTech Research

Research projects

“Blockchain, Information Production, and Ownership Structure: Decentralized Academic Journals”
Dr. Kyoung Jin Choi, PhD; Dr. Jaevin Park, PhD
Recently there has been a burst of literature proposing blockchain-based academic publishing in science. This paper investigates the economic implications of the decentralized refereeing process suggested by the literature, in which authors and referees are individually incentivized. We study models in which the journal publishes qualified papers under two types of information asymmetry: paper quality and type of referee. We characterize the conditions under which equilibrium in decentralization exists or fails and leads to a better outcome than in centralization. Our research also helps us understand how to design an incentive structure for specialists required for funding decisions, loan inspections, and credit ratings.


“Bitcoin Microstructure and the Kimchi Premium”
Dr. Kyoung Jin Choi, PhD; Dr. Alfred Lehar, PhD; Dr. Ryan Stauffer, PhD
Between January 2016 and January 2020, bitcoin were on average 2.27% more expensive in Korea than in the United States, a fact commonly referred to as the Kimchi premium. We argue that capital controls amplify frictions from the microstructure of the bitcoin network that limit the ability of arbitrageurs to take advantage of price differences. We find that the bitcoin premia are positively related to transaction costs and volatilities of the bitcoin price and the premium, in line with the idea that the costs and the associated price risk during the transaction period make trades less attractive for arbitrageurs, and hence allow prices to diverge. A cross country comparison shows that bitcoin tend to trade at higher prices in countries with lower financial freedom.


“Decentralized Exchanges”
Dr. Alfred Lehar, PhD; Dr. Christine A. Parlour, PhD
Uniswap is one of the largest decentralized exchanges with a liquidity balance of over 3 billion USD and daily trading volume of over 700 million USD. It is designed as a system of smart contracts on the Ethereum blockchain, and is a new model of liquidity provision, so called automated market making. We collect and analyze data on all 19 million Uniswap interactions from 2018 to the current time. For this new market, we characterize equilibrium liquidity pools and provide evidence that they are stable. We compare this automated market maker to Binance and establish absence of arbitrage and show conditions under which the AMM dominates a limit order market. 


“Miner Collusion and the BitCoin Protocol”
Dr. Alfred Lehar, PhD; Dr. Christine A. Parlour, PhD
Bitcoin users can offer fees to the miners who record transactions on the Blockchain. We document high variation of Bitcoin fees, not only over time, but also within blocks. Further, the blockchain rarely runs at capacity, even though there appears to be excess demand. We argue that this is inconsistent with competitive mining but is consistent with strategic capacity management. If agents believe that only high fee transactions are executed in a timely fashion then strategic capacity management can be used to increase fee revenue. We note that mining pools facilitate collusion and estimate that they have extracted least 200 million USD a year in excess fees by making processing artificially capacity scarce.


“Battle of the Bots: Flash Loans, Miner Extractable Value and Efficient Settlement”
Dr. Alfred Lehar, PhD; Dr. Christine A. Parlour, PhD
Settlement on decentralized ledgers enables flash loans — loans that are both originated and repaid within the same instant of settlement time. We document empirically that these are used primarily for arbitrage. The settlement also allows settlement agents to expropriate profitable arbitrage trades. We show theoretically and empirically that private settlement emerges endogenously as a mechanism to mitigate this expropriation. We document payments from arbitrageurs to private settlers that exceed 1 million USD per day. In a simple model, we characterize the socially optimal mix of private and public settlement.


“Central Bank Digital Currency and Banks' Risk-taking”
Dr. Kyoung Jin Choi, PhD; Dr. Keeyoung Rhee, PhD
This paper investigates the impact of the introduction of the central bank digital currency (CBDC) on banks' stability when depositors' financial intelligence is heterogeneous. There is a non-linear relationship between banks' risk-taking behaviour and the level of regulation/infrastructure provision for CBDC, which provides important policy implications.


“Decentralized Money Supply: Lessons from Algorithmic Stablecoins
Dr. Kyoung Jin Choi, PhD; Dr. Jaevin Park, PhD
We show that the key mechanism of algorithmic stablecoins is to induce decentralized open-market operations (OMPs). Insights into this mechanism can improve the current system of fiat money supply. The paper also explains why Terra-Luna collapsed and why it is a bad decision to have a reserve asset such as bitcoin to back up the cryptocurrency TerraUSD (UST).


“Private Settlement in Blockchain Systems”
Dr. Alfred Lehar, PhD; Dr. Motahhareh Moravvej-Hamedani, PhD
We provide evidence that the settlement market in blockchain systems deviates from a perfectly competitive market. Examining the bitcoin blockchain, we document that 5.88% of transactions, which we label as private, bypass the competitive process and seem to be channelled directly to miners. Users of private transactions post more transactions on the blockchain and space their transactions more evenly. Despite being more active than the average user, they tend to get their transactions confirmed by only one miner, which is statistically a very unlikely outcome in competitive markets. Our findings are consistent with frequent users engaging in long-term agreements with specific miners. In return for channeling all their transactions to one miner, they pay on average lower fees and face a lower variation in fees. Our paper provides novel evidence of how settlement contracts are structured and how potential gains and incentives can be shared amongst the system participants.


“Systemic Fragility in Decentralized Markets”
Dr. Alfred Lehar, PhD; Dr. Christine A. Parlour, PhD
We analyze a unique data set of liquidations on two DeFi lending platforms – Compound and Aave. Using Blockchain transaction data, we document the high frequency price impact of these liquidity trades on 9 different decentralized exchanges. Consistent with large block trades in equity markets there is a temporary and permanent price impact of collateral asset sales in DeFi. Our work highlights the systemic fragility of Decentralized Finance.


“Liquidity Fragmentation on Decentralized Exchanges”
Dr. Alfred Lehar, PhD; Dr. Christine A. Parlour, PhD; Marius Zoican, PhD
Paper presented at: Tokenomics 2023, Gillmore Centre Annual Conference 2023, Edinburgh Economics of Technology, Financial Intermediation Research Society 2023, the Northern Finance Association 2023, the UNC Junior Faculty Finance Conference, the Microstructure Exchange, University of Melbourne, Hong Kong Baptist University, Chicago Booth

“Decentralized Exchange: The Uniswap Automated Market Maker”
Dr. Alfred Lehar, PhD; Dr. Christine A. Parlour, PhD
In a study published in the Journal of Finance (2023), we uncover deviations from perfect competition in blockchain settlement markets, specifically within the Bitcoin blockchain. Our analysis identifies that 5.88% of transactions, termed as 'private,' circumvent the competitive bidding process and are directly sent to specific miners. These private transactions are characterized by higher activity and more evenly spaced postings on the blockchain. Interestingly, despite their increased activity, these users typically have their transactions confirmed by only one miner, a scenario unlikely in competitive markets. This pattern suggests the existence of long-term agreements between frequent users and particular miners, where users benefit from lower and more consistent fees in exchange for exclusive transaction routing. This paper provides groundbreaking insights into the structuring of settlement contracts and the distribution of gains and incentives among blockchain participants.


“A Proposal for a Canadian CBDC: Model X Final Report”
Dr. Kyoung Jin Choi, PhD; Dr. Ryan Henry, PhD; Dr. Alfred Lehar, PhD; Dr. Joel Reardon, PhD; Dr. Reihaneh Safavi-Naini, PhD
Prepared for the Bank of Canada, Feb. 11, 2021

Community Engagement

DeFi Guest Speaker

Date Speaker
2023-10-02 Ganesh Swami from Covalent
2023-10-16 Austin Adams from Uniswap Labs
2023-10-23 Danny Leong from Calgary Police Service
2023-10-30 Sebastien Davies from Aquanow
2023-11-06 Gordon Liao from Chief Economist, Circle USDC
2023-11-20 Jonathan Chiu from Bank of Canada

Time: 5:30 - 6:30 PM    Location: Scurfield Hall 202 (SH202)

Call for research assistants in FinTech!

Decentralized finance is based on smart contracts (computer programs) that are deployed mostly on the Ethereum blockchain. Many applications, such as exchanges, secured lending and investments, are replicated in this ecosystem. Growth in this space is spectacular and billions of dollars are traded on smart contract-based systems each day. The underlying technology is bound to shape the finance industry in the coming years.

We are looking for research assistants (RA) in this space. Research assistants will be self-motivated—ready to collect information from white papers, developer docs, and forum posts—and have an interest in working with large data sets. Programming skills are not required but helpful for some tasks.  Research assistants, will acquire skills that will place them in a unique position within a vibrant and hot segment of the job market. RA roles vary from more to less technical positions and include the following:

Being a subject expert on specific DeFi protocols and learning how to interpret data for that protocol from the blockchain

Organizing fireside chats with industry leaders

Coding some of the interfaces between the blockchain node and a database

Helping with data analysis

To apply, please send your CV and a short paragraph about why you are interested to