Linköping University | Department of Management and Engineering Bachelor’s Thesis in Economics Spring 2021| LIU-IEI-FIL-G--21/02425--SE Decentralized Finance and the Crypto Market: Indicators and Correlations Decentraliserad Finans och Kryptomarknaden: Indikatorer och Korrelationer Fadel Dabaja Tobias Dahlberg Supervisor: Gazi Salah Uddin Linköping University SE-581 83 Linköping, Sweden +46 013 28 10 00, www.liu.se Title Decentralized Finance and the Crypto Market: Indicators and Correlations Authors Dabaja, Fadel (
[email protected]) Dahlberg, Tobias (
[email protected]) Supervisor Salah Uddin, Gazi Publication Bachelor’s Thesis in Economics 15 credits Spring 2021 ISRN-number: LIU-IEI-FIL-G--21/02425--SE Linköping University Department of Management and Engineering (IEI) 1 Abstract Background: Within the emerging field of cryptocurrencies, the sub-sector DeFi (decentralized finance) has experienced explosive growth over the last year, and its importance for crypto as a whole has grown with it. The currencies have developed from simple peer-to-peer transactions to complex applications such as lending and exchanges. Several studies have researched determinants of cryptocurrency prices, and a few have focused on metrics central to DeFi, such as total value locked (TVL). However, academia has aimed sparse attention to the relationships between these metrics, which this article seeks to amend. Aim: The purpose of this essay is to research the relationship between total value locked (TVL) in DeFi, the prices of native tokens on related platforms, and the price of ether, which is the dominant currency across DeFi. Methodology: This study is deductive and quantitative and categorized as a causal-comparative thesis.