From Curved Bonding to Configuration Spaces

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.Series: Working Paper Series / Institute for Cryptoeconomics / Interdisciplinary Researc

Correlation between capital markets and cryptocurrency: impact of the coronavirus

The objective of the study is to use daily Thai data analysis to strengthen correlations between Bitcoin and conventional asset measurements. The most popular asset prices and indices include gold, oil, the SET50 index, Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ripple (XRP), Dashcoin (DASH), Stellar Lumens (XLM), Binance coin (BNB), and Dogecoin (DOGE). We find a significant correlation between cryptocurrencies and the digital economy using a matrix approach to the Pearson correlation coefficient. With the help of a minimal spanning tree model and random matrix theory, we can determine the shortest route between assets. Yet, as predicted, only a small percentage of the greatest eigenvalues diverge. We are also developing a novel technique to find the SET-50 index. In an investment portfolio during the coronavirus period, alternatives to the gold price and the DOGE may offer possibilities for risk diversification

What is the potential value of tokens and token engineering for the architecture, engineering, and construction industry? A positional paper.

What is the value of tokens for blockchain applications in Architecture, Engineering, and Construction (AEC)? How can token engineering be contextualized in AEC? This positional paper instigates the tackling of these largely unexplored questions. Following a literature review and a visiting of token engineering fundamentals, the paper’s position is that tokens can indeed hold potential value for AEC. This value can be direct, utilitarian, security-related, and/or pegged, and reflected in technical and economic terms. For this value to be realized, the token must be systematically embedded in the AEC ecosystem – therefore dependent on sociotechnical parameters in AEC

Stochastic modeling and analysis of the bitcoin protocol in the presence of block communication delays

International audienceWe analyze the protocol of the Bitcoin blockchain by using the PRISM probabilistic model checker. In particular, we (i) extend PRISM with the ledger data type, (ii) model the behaviour of the key participants in the protocol-the miners-and (iii) describe the whole protocol as a parallel composition of processes. The probabilistic analysis of the model highlights how forks happen and how they depend on specific parameters of the protocol, such as the difficulty of the cryptopuzzle and the network communication delays. Our results confirm that considering transactions in blocks at depth larger than 5 as permanent is reasonable because the majority of miners have consistent blockchains up-to that depth with probability of almost 1. We also study the behaviour of networks with churn miners, which may leave the network and rejoin afterwards, and with different topologies

A Conceptual Foundation for Blockchain Development: The Contribution of Ibn Khaldun

Blockchain is a revolutionary technology that has provided the potential answers for many real-world problems in this digital era. Blockchain is a topic of immense interest in various industries and academia in terms of discovering technology and identifying challenges and innovative practical implementation for the industry. This study deliberates the challenges that are of major concern in designing a Blockchain platform. In this context, the problems such as inefficient technology design, the criminal connection, scalability, energy consumption, privacy, regulation, security, lack of adequate skill sets, energy consumption and public perception are uncovered to be significant. Due to such challenges, the blockchain technologies have emitted a negative impression due to its inabilities to be effectively implemented while, at the same time, its advantages could not be fully reaped by its stakeholders. The aim of this study, hence, is to evaluate the blockchain initiatives and development in light of the eight foundations for economic development as propounded by Ibn Khaldun. Using Ibn Khaldun’s theory, each challenge is discussed and analyzed to find the answers and solutions for addressing and overcoming the afore-mentioned challenges

Stablecoins 2.0: Economic Foundations and Risk-based Models

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 non-custodial 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

Blockchain systems, technologies and applications: a methodology perspective

In the past decade, blockchain has shown a promising vision to build trust without any powerful third party in a secure, decentralized and scalable manner. However, due to the wide application and future development from cryptocurrency to the Internet of things, blockchain is an extremely complex system enabling integration with mathematics, computer science, communication and network engineering, etc. By revealing the intrinsic relationship between blockchain and communication, networking and computing from a methodological perspective, it provided a view to the challenge that engineers, experts and researchers hardly fully understand the blockchain process in a systematic view from top to bottom. In this article we first introduce how blockchain works, the research activities and challenges, and illustrate the roadmap involving the classic methodologies with typical blockchain use cases and topics. Second, in blockchain systems, how to adopt stochastic process, game theory, optimization theory, and machine learning to study the blockchain running processes and design the blockchain protocols/algorithms are discussed in details. Moreover, the advantages and limitations using these methods are also summarized as the guide of future work to be further considered. Finally, some remaining problems from technical, commercial and political views are discussed as the open issues. The main findings of this article will provide a survey from a methodological perspective to study theoretical model for blockchain fundamentals understanding, design network service for blockchain-based mechanisms and algorithms, as well as apply blockchain for the Internet of things, etc