Blockchain token economics: A mean-field-type game perspective

Julian Barreiro-Gomez, Tembine Hamidou

Research output: Contribution to journalArticle

Abstract

This paper studies the blockchain cryptographic tokens by means of mean-field-type game theory. It introduces the variance-aware utility function per decision-maker to capture the risk of cryptographic tokens associated with the uncertainties of technology adoption, network security, regulatory legislation, and market volatility. We establish a relationship between the network characteristics, token price, number of token holders, and token supply. Both in-chain diversification and cross-chain diversification among tokens are examined by using a mean-variance approach. The results suggest that the number of tokens in circulation needs to be adjusted in order to capture risk-awareness and self-regulatory behavior in blockchain token economics. The Sharpe and Modigliani ratios for cryptographic tokens are revisited.

Original languageEnglish (US)
Article number8717636
Pages (from-to)64603-64613
Number of pages11
JournalIEEE Access
Volume7
DOIs
StatePublished - Jan 1 2019

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Economics
Network security
Game theory
Uncertainty

Keywords

  • Blockchain
  • game theory
  • mean-field
  • network economics
  • risk
  • token

ASJC Scopus subject areas

  • Computer Science(all)
  • Materials Science(all)
  • Engineering(all)

Cite this

Blockchain token economics : A mean-field-type game perspective. / Barreiro-Gomez, Julian; Hamidou, Tembine.

In: IEEE Access, Vol. 7, 8717636, 01.01.2019, p. 64603-64613.

Research output: Contribution to journalArticle

Barreiro-Gomez, Julian ; Hamidou, Tembine. / Blockchain token economics : A mean-field-type game perspective. In: IEEE Access. 2019 ; Vol. 7. pp. 64603-64613.
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