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

    Fingerprint

    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.
    @article{82f003dcd24a46cea292da8c184a1a61,
    title = "Blockchain token economics: A mean-field-type game perspective",
    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.",
    keywords = "Blockchain, game theory, mean-field, network economics, risk, token",
    author = "Julian Barreiro-Gomez and Tembine Hamidou",
    year = "2019",
    month = "1",
    day = "1",
    doi = "10.1109/ACCESS.2019.2917517",
    language = "English (US)",
    volume = "7",
    pages = "64603--64613",
    journal = "IEEE Access",
    issn = "2169-3536",
    publisher = "Institute of Electrical and Electronics Engineers Inc.",

    }

    TY - JOUR

    T1 - Blockchain token economics

    T2 - A mean-field-type game perspective

    AU - Barreiro-Gomez, Julian

    AU - Hamidou, Tembine

    PY - 2019/1/1

    Y1 - 2019/1/1

    N2 - 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.

    AB - 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.

    KW - Blockchain

    KW - game theory

    KW - mean-field

    KW - network economics

    KW - risk

    KW - token

    UR - http://www.scopus.com/inward/record.url?scp=85066601465&partnerID=8YFLogxK

    UR - http://www.scopus.com/inward/citedby.url?scp=85066601465&partnerID=8YFLogxK

    U2 - 10.1109/ACCESS.2019.2917517

    DO - 10.1109/ACCESS.2019.2917517

    M3 - Article

    VL - 7

    SP - 64603

    EP - 64613

    JO - IEEE Access

    JF - IEEE Access

    SN - 2169-3536

    M1 - 8717636

    ER -