A Puff of Steem: Security Analysis of Decentralized Content Curation

Decentralized content curation is the process through which uploaded posts are ranked and filtered based exclusively on users\u27 feedback. Platforms such as the blockchain-based Steemit employ this type of curation while providing monetary incentives to promote the visibility of high quality posts according to the perception of the participants. Despite the wide adoption of the platform very little is known regarding its performance and resilience characteristics. In this work, we provide a formal model for decentralized content curation that identifies salient complexity and game-theoretic measures of performance and resilience to selfish participants. Armed with our model, we provide a first analysis of Steemit identifying the conditions under which the system can be expected to correctly converge to curation while we demonstrate its susceptibility to selfish participant behaviour. We validate our theoretical results with system simulations in various scenarios

Leading Digital Socio-Economy to Efficiency -- A Primer on Tokenomics

Through the usage of cryptographically secure and digitally scarce tokens, a next evolutionary step of the Internet has come. Cryptographic token represent a new phenomena of the crypto movement with the ability to program rules and incentives to steer participant behaviors that transforms them from purely technical to socio-economic innovations. Tokens allow the coordination, optimization and governing large networks of resources in a decentralized manner and at scale. Tokens bring powerful network effects that reward participants relative to their stage of adoption, the value they contribute and the risk they bear in an auditable, decentralized and therefore trustful way. We illustrate which important role tokenomics plays in the creation of, and sustainable and efficient operation of cooperations.Comment: 9 page

Security and efficiency of collateral in decentralized finance

Decentralized Finance (DeFi) promises to be a new contender for a radically new financial system. Its foundations are censorship-resistant, non-custodial, and transparent financial protocols. Securing these protocols is achieved by combining cryptographic primitives with economic incentives instead of relying on trusted intermediaries. In DeFi, financial collateral is the central incentive measure providing repercussions against "misbehaving” agents. However, requiring collateral introduces security and efficiency concerns. (i) Securing DeFi protocols using price-volatile and complex assets requires careful risk management. (ii) Efficiency of capital is diminished since locking assets is an opportunity cost and restricts access to DeFi to agents with sufficient funds. We tackle these issues by developing new protocols to optimize collateral requirements in existing DeFi protocols safely. Our contributions are threefold. First, we provide a risk-based classification of collateral applied in DeFi protocols. Specifically, the classification serves as the starting point to develop a model capturing the security property of financial collateral with unique risks in DeFi. Second, we present two protocols that can be integrated into existing DeFi protocols. Promise transforms suitable DeFi protocols into a subscription mechanism lowering the initial capital locking requirements thus tackling the capital efficiency of collateral. Balance is a protocol to reduce collateral in DeFi protocols safely. Balance is similar to a credit scoring system where “well-behaving” agents enjoy a lowered collateral. As such, Balance can be used both to tailor security of protocols by required per-agent collateral requirements instead of per-protocol requirements and, at the same time, increase capital efficiency of collateral. We demonstrate the practical applicability of Promise and Balance by decreasing collateral in the XCLAIM cross-chain communication protocol by up to 10% under conservative assumptions. Third, we discuss the practical security of financial collateral. We outline new types of attacks on DeFi protocols secured by collateral through trustless coordination of rational agents and so-called flash loans with the example of the popular Maker protocol. We conclude by noting the perils of constructing collateralized DeFi protocols and outlining strands of future work to increase their security and efficiency.Open Acces

Applications of Blockchain for the Governance of Integrated Project Delivery: A Crypto Commons Approach

This paper outlines why and how blockchain can digitally support and evolve the governance of collaborative project deliveries, such as integrated project deliveries (IPDs), to provide the foundation for novel and disruptive forms of organizational collaboration in the construction industry. Previous work has conceptualized IPDs as a common pool resource (CPR) scenario, where shared resources are collectively governed. Through the use of blockchain and smart contracts for trustworthy peer-to-peer transactions and execution logic, Ostrom's design principles can be digitally encoded to scale CPR scenarios. Building on the identified connections, the paper 1) synthesizes fourteen blockchain-based mechanisms to govern CPRs, 2) identifies twenty-two applications of these mechanisms to govern IPDs, and 3) introduces a conceptualization of the above relationships towards a holistic understanding of collaborative project deliveries on the crypto commons for novel collective organization of construction project delivery between both humans and machines

A Puff of Steem: Security Analysis of Decentralized Content Curation

Decentralized content curation is the process through which uploaded posts are ranked and filtered based exclusively on users' feedback. Platforms such as the blockchain-based Steemit employ this type of curation while providing monetary incentives to promote the visibility of high quality posts according to the perception of the participants. Despite the wide adoption of the platform very little is known regarding its performance and resilience characteristics. In this work, we provide a formal model for decentralized content curation that identifies salient complexity and game-theoretic measures of performance and resilience to selfish participants. Armed with our model, we provide a first analysis of Steemit identifying the conditions under which the system can be expected to correctly converge to curation while we demonstrate its susceptibility to selfish participant behaviour. We validate our theoretical results with system simulations in various scenarios.Comment: 15 pages main text, 35 pages in total, 6 figures, 6 algorithms. Contains mathematical analysis and computer simulatio

Token-weighted crowdsourcing

Blockchain-based platforms often rely on token-weighted voting (“τ-weighting”) to efficiently crowdsource information from their users for a wide range of applications, including content curation and on-chain governance. We examine the effectiveness of such decentralized platforms for harnessing the wisdom and effort of the crowd. We find that τ-weighting generally discourages truthful voting and erodes the platform’s predictive power unless users are “strategic enough” to unravel the underlying aggregation mechanism. Platform accuracy decreases with the number of truthful users and the dispersion in their token holdings, and in many cases, platforms would be better off with a “flat” 1/n mechanism. When, prior to voting, strategic users can exert effort to endogenously improve their signals, users with more tokens generally exert more effort—a feature often touted in marketing materials as a core advantage of τ-weighting—however, this feature is not attributable to the mechanism itself, and more importantly, the ensuing equilibrium fails to achieve the first-best accuracy of a centralized platform. The optimality gap decreases as the distribution of tokens across users approaches a theoretical optimum, which we derive, but tends to increase with the dispersion in users’ token holdings. This paper was accepted by Gabriel Weintraub, revenue management and market analytics.Published versio

Incentivized Research Data Sharing, Reusing and Repurposing with Blockchain Technologies

Data is the lifeblood of many organizations. Compared to the centralized mechanisms of data sharing (and the subsequent reuse and repurposing), many, if not all, aspects of these processes can be decentralized by using blockchain and provenance semantics. By capturing metadata details at each step of the workflow, data will be easier to audit, verify, and merge with related datasets. It is common in settings where data is either sensitive or valuable (or both) to have formal data use agreements or sometimes less formal rules for reuse, which we have captured in smart contracts. A key innovative aspect of this work is the departure from the traditional natural language-based data use agreements with the aim of making these agreements more computable, resulting in enhanced usability by a broader community. We have also engineered an innovative incentive mechanism for sharing data using an ERC20 token, a popular technical standard for developing fungible tokens on the Ethereum blockchain. The system we developed can be used to track data reuse, thus providing metrics for use in measuring data producers’ impact for enterprise reward structures and research measures such as an h-index. As an example application, we discuss how this approach could radically improve the quality and the efficiency of scientific output in the setting of research data sharing. We address the challenge of the costly and time-consuming effort needed to bring an innovative idea from the bench (basic research) to the bedside (clinical level)