On modeling blockchain-enabled economic networks as stochastic dynamical systems

Zhang, Zixuan; Zargham, Michael; Preciado, Víctor M.

doi:10.1007/s41109-020-0254-9

Cited by 21 publications

(18 citation statements)

References 43 publications

(37 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…This section parallels extant work of[15] and[16] but does not require the formal ledger or block structure to define the state space representation.…”

mentioning

confidence: 85%

See 1 more Smart Citation

From Curved Bonding to Configuration Spaces

Zargham

Shorish

Paruch

2020

2020 IEEE International Conference on Blockchain and Cryptocurrency (ICBC)

Self Cite

View full text Add to dashboard Cite

Bonding curves are continuous liquidity mechanisms which are used in market design for cryptographically-supported token economies. Tokens are atomic units of state information which are cryptographically verifiable in peer-to-peer networks. Bonding curves are an example of an enforceable mechanism through which participating agents influence this state. By designing such mechanisms, an engineer may establish the topological structure of a token economy without presupposing the utilities or associated actions of the agents within that economy. This is accomplished by introducing configuration spaces, which are proper subsets of the global state space representing all achievable states under the designed mechanisms. Any global properties true for all points in the configuration space are true for all possible sequences of actions on the part of agents. This paper generalizes the notion of a bonding curve to formalize the relationship between cryptographically enforced mechanisms and their associated configuration spaces, using invariant properties of conservation functions. We then proceed to apply this framework to analyze the augmented bonding curve design, which is currently under development by a project in the non-profit funding sector.

show abstract

“…This section parallels extant work of[15] and[16] but does not require the formal ledger or block structure to define the state space representation.…”

mentioning

confidence: 85%

“…In principle one may use any positive on-chain measurable signal as a measure of progress, or key performance indicator (KPI), and vest as a function of this KPI in place of blocktime, as discussed in [16]. This is accomplished by substituting any strictly positive, non-decreasing measure for block height k in Equations (41) and (42).…”

Section: Lemmamentioning

confidence: 99%

From Curved Bonding to Configuration Spaces

Zargham

Shorish

Paruch

2020

2020 IEEE International Conference on Blockchain and Cryptocurrency (ICBC)

Self Cite

View full text Add to dashboard Cite

show abstract

“…Instead of modelling all miners with the same incentives, a forking model considers that miners already mining on a fork will have a higher incentive to take the bribe as they are invested in a fork. Additionally, the setup in [11] can be extended by a network game as a stochastic dynamic system [85] or a global game [65] with noisy observations (e.g., network delay, reward expectations). Moreover, we can incorporate various assumption of risk-appetite of miners [21], selfish mining [31], and the impact of block rewards in comparison to transaction fees [20,80].…”

Section: Forking Modelsmentioning

confidence: 99%

Stablecoins 2.0

Klages‐Mundt

Harz

Gudgeon

et al. 2020

Proceedings of the 2nd ACM Conference on Advances in Financial Technologies

View full text Add to dashboard Cite

Stablecoins are one of the most widely capitalized type of cryptocurrency. However, their risks vary significantly according to their design and are often poorly understood. We seek to provide a sound foundation for stablecoin theory, with a risk-based functional characterization of the economic structure of stablecoins. First, we match existing economic models to the disparate set of custodial systems. Next, we characterize the unique risks that emerge in noncustodial stablecoins and develop a model framework that unifies existing models from economics and computer science. We further discuss how this modeling framework is applicable to a wide array of cryptoeconomic systems, including cross-chain protocols, collateralized lending, and decentralized exchanges. These unique risks yield unanswered research questions that will form the crux of research in decentralized finance going forward.

show abstract

“…Here we introduce a minimal theory relevant to the understanding of the present study. For a more complete treatment, please see [16] and [6].…”

Section: The Statespace Framework: An Event Based State Space Modelmentioning

confidence: 99%

Evidence Based Decision Making in Blockchain Economic Systems: From Theory to Practice

Laskowski¹,

Zargham²,

Turesson³

et al. 2020

SSRN Journal

Self Cite

View full text Add to dashboard Cite

We present a methodology for evidence based design of cryptoeconomic systems, and elucidate a real-world example of how this methodology was used in the design of a blockchain network. This work provides a rare insight into the application of Data Science and Stochastic Simulation and Modelling to Token Engineering. We demonstrate how the described process has the ability to uncover previously unexpected system level behaviors. Furthermore, it is observed that the process itself creates opportunities for the discovery of new knowledge and business understanding while developing the system from a high level specification to one precise enough to be executed as a computational model. Discovery of performance issues during design time can spare costly emergency interventions that would be necessary if issues instead became apparent in a production network. For this reason, network designers are increasingly adopting evidence-based design practices, such as the one described herein. CCS CONCEPTS• Insert your first CCS term here • Insert your second CCS term here • Insert your third CCS term here

show abstract

On modeling blockchain-enabled economic networks as stochastic dynamical systems

Cited by 21 publications

References 43 publications

From Curved Bonding to Configuration Spaces

From Curved Bonding to Configuration Spaces

Stablecoins 2.0

Evidence Based Decision Making in Blockchain Economic Systems: From Theory to Practice

Contact Info

Product

Resources

About