Abstract
The rapid growth of the Ethereum ecosystem since 2020 has been driven by the proliferation of several DeFi protocols [10], which are application-layer programs that provide Decentralized Finance (DeFi) services [14, 16] such as the exchange of cryptoassets on decentralized exchanges (DEXs) [2, 7, 15], their lending and borrowing [1, 4, 8], or the creation and trade of related derivative contracts [11].
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A Visualization Tool
A Visualization Tool
In the main body of the work we focused on the Uniswap “swap” building block to describe the concept of composability in the DeFi Ethereum ecosystem. However, the nested structures and the extracted building blocks are often much more complex. In this Appendix we describe a visualization tool that we implemented to allow a more systematic investigation of the nested structures identified within our dataset. The visualization tool can be found at the following link: https://github.com/PietroSaggese/Visualize_DeFi_compositions.
Main interface of the visualization tool. Transactions are grouped by protocol called in the external transaction.
Figure 5 shows the main interface. Each rectangle corresponds to a protocol, and the size is proportional to the number of external transactions directed to it. Uniswap is by far the largest protocol in terms of external calls directed to protocol-specific CAs. It is possible to browse the rectangles to observe what is the fraction of protocol-specific transactions that contain nested building blocks (i.e., that contain internal compositions) in subsequent levels of depth, and what protocols are further called. This operation is repeated for all levels, until the end of the execution tree of all transactions is reached.
Figure 6a shows 1inch as an example. Each rectangle represents the fraction of transactions that contain further building blocks in the next level of depth. As one can see, a large fraction of calls contains building blocks induced by CAs related to Uniswap and to other DEX protocols. We explore one of the rectangles in Fig. 6b. We investigate the fraction of 1inch transactions that call DeFi CAs of four protocols (curvefinance, sushiswap, synthetix, uniswap) in the next level of depth. The structure is complex, and other building blocks can be found in a repeatedly nested structure. Our second example is the Instadapp protocol. It is reported in Fig. 7 in order to show that nested structures can appear also in deeper levels of the tree structure. We browse the structure up to the fourth level of nestedness (Figs. 7a to 7e) and observe in Fig. 7f that a large fraction of the transactions contain calls to several other protocols (Aave, 1inch, Dydx, Compound, ...). In summary, these two examples show that building blocks are heavily nested, also in deeper levels of the transaction execution trees, thus being a sign that internal compositions exist, and can be systematically investigated with our visualization tool.
1inch nested building blocks.
Instadapp nested building blocks.
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Kitzler, S., Victor, F., Saggese, P., Haslhofer, B. (2023). A Systematic Investigation of DeFi Compositions in Ethereum. In: Matsuo, S., et al. Financial Cryptography and Data Security. FC 2022 International Workshops. FC 2022. Lecture Notes in Computer Science, vol 13412. Springer, Cham. https://doi.org/10.1007/978-3-031-32415-4_18
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DOI: https://doi.org/10.1007/978-3-031-32415-4_18
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