Time: March 21 (Tuesday) 10:00-11:30 a.m

Tencent Conference number: 290 128 955

Speaker: Professor Hsing Kenneth Cheng, University of Florida

Brief introduction of the report:

The cryptocurrency (crypto) market has grown dramatically over the past decades since the emergence of the Bitcoin protocol in 2008. Traditionally, blockchain users would trade cryptos on centralized exchanges such as Binance, OKex, and Huobi. Decentralized exchanges (DEXs), exchanges that allow blockchain users to directly buy and sell cryptos on the chain without involving custody of traders’ crypto assets, started to blossom recently with the trading volume on DEX reaching 80% on-chain market share at its peak in 2021. As the DEX becomes immensely popular, so does the vampire attack on the DEX platform, where the entrant attacker clones the incumbent’s business model and drains liquidity from the incumbent to its cloned platform by providing tokenized rewards to the incumbent’s liquidity providers. We implement a quasi-experimental design to examine the impact of the vampire attack launched by Sushiswap (the attacker) against Uniswap (the incumbent DEX). We examine both the deposit-side and exchange-side impact of the vampire attack on the operational performance of the liquidity pools on Uniswap. Surprisingly, there is no significant effect of the vampire attack on the liquidity on the deposit side. Even more surprisingly, the vampire attack significantly increases the incumbent’s trading volume on the exchange side. Our study uncovers the underlying reasons that contribute to these intriguing results.

About the speaker:

Hsing Kenneth Cheng is the John B. Higdon Distinguished Scholar at the University of Florida and Chair of the Department of Information Systems and Operations Management at the Warrington School of Business. He received his Ph.D. in Computer and Information Systems from the University of Rochester in 1992. Professor Zheng's research interests include analysis of the impact of Internet technologies on software development and marketing, and information systems policy issues (especially the national debate on net neutrality). Based on papers published in the top three information systems journals, Professor Zheng is ranked 20th (2009-2011) and 16th (2010-2012) among the Global Information Systems 100 researchers. Professor Zheng is currently Deputy editor of Decision Sciences. Senior editor, Journal of the Association for Information Systems, Information Systems and electronic Management. He served as Associate Editor of Information Systems Research from 2011 to 2014, has served on the program committee of many information systems conferences and seminars, and served as the director of Workshop on E-Business (2003). 2012) and Co-chair of the Taiwan Summer Workshop on Information Management program.

(Hosted by: Department of Management Engineering, Research and Academic Exchange Center)