Blockchain

Financing Ventures with Fungible Tokens ArXiv ID: ssrn-3137213 “View on arXiv” Authors: Unknown Abstract This paper explores how entrepreneurs can use fungible tokens—whereby they issue digital assets and commit to only accept those tokens as payment for future pro Keywords: Fungible Tokens, Initial Coin Offerings (ICOs), Venture Capital, Blockchain, Alternative Investments Complexity vs Empirical Score Math Complexity: 7.5/10 Empirical Rigor: 2.0/10 Quadrant: Lab Rats Why: The paper presents a formal economic model with proofs and an impossibility result, indicating significant theoretical math density, but it lacks any implementation-heavy backtesting, datasets, or statistical metrics, relying instead on theoretical analysis. flowchart TD A["Research Question:<br>How do entrepreneurs use fungible tokens for venture financing?"] --> B["Methodology: Conceptual Model & Case Studies"] B --> C{"Data & Inputs"} C --> C1["Token Economics"] C --> C2["ICO Whitepapers"] C --> C3["Blockchain Ledgers"] C --> C4["Regulatory Frameworks"] D["Computational Processes<br>Simulation of Funding Rounds"] --> E["Key Findings & Outcomes"] E --> E1["Tokens as Equity Alternatives"] E --> E2["Reduced Barriers to Entry"] E --> E3["Regulatory Uncertainties"] C1 & C2 & C3 & C4 --> D

Initial Coin Offerings and the Value of Crypto Tokens ArXiv ID: ssrn-3143343 “View on arXiv” Authors: Unknown Abstract This paper explores how entrepreneurs can use initial coin offerings — whereby they issue crypto tokens and commit to only accept those tokens as payment for th Keywords: Initial Coin Offerings (ICOs), Crypto Tokens, Crowdfunding, Blockchain, Alternative Investments Complexity vs Empirical Score Math Complexity: 6.5/10 Empirical Rigor: 3.0/10 Quadrant: Lab Rats Why: The paper employs a formal economic model with equilibrium analysis and derives theoretical results about token value and fundraising, indicating moderate-to-high mathematical complexity. However, the work is primarily theoretical with no backtests, datasets, or empirical implementation details, placing it in the ‘Lab Rats’ quadrant. flowchart TD A["Research Question<br/>Value of crypto tokens in ICOs"] --> B["Methodology<br/>Theoretical model & entrepreneurial decisions"] B --> C["Data/Input<br/>Token demand, network size, funding goals"] C --> D["Computational Process<br/>Mathematical derivation of token value"] D --> E["Key Findings<br/>Tokens enable crowdfunding<br/>Value tied to platform usage<br/>Commitment to token acceptance is key"]

Impact of Volatility on Time-Based Transaction Ordering Policies ArXiv ID: 2512.23386 “View on arXiv” Authors: Sunghun Ko, Jinsuk Park Abstract We study Arbitrum’s Express Lane Auction (ELA), an ahead-of-time second-price auction that grants the winner an exclusive latency advantage for one minute. Building on a single-round model with risk-averse bidders, we propose a hypothesis that the value of priority access is discounted relative to risk-neutral valuation due to the difficulty of forecasting short-horizon volatility and bidders’ risk aversion. We test these predictions using ELA bid records matched to high-frequency ETH prices and find that the result is consistent with the model. ...

Model of an Open, Decentralized Computational Network with Incentive-Based Load Balancing ArXiv ID: 2501.01219 “View on arXiv” Authors: Unknown Abstract This paper proposes a model that enables permissionless and decentralized networks for complex computations. We explore the integration and optimize load balancing in an open, decentralized computational network. Our model leverages economic incentives and reputation-based mechanisms to dynamically allocate tasks between operators and coprocessors. This approach eliminates the need for specialized hardware or software, thereby reducing operational costs and complexities. We present a mathematical model that enhances restaking processes in blockchain systems by enabling operators to delegate complex tasks to coprocessors. The model’s effectiveness is demonstrated through experimental simulations, showcasing its ability to optimize reward distribution, enhance security, and improve operational efficiency. Our approach facilitates a more flexible and scalable network through the use of economic commitments, adaptable dynamic rating models, and a coprocessor load incentivization system. Supported by experimental simulations, the model demonstrates its capability to optimize resource allocation, enhance system resilience, and reduce operational risks. This ensures significant improvements in both security and cost-efficiency for the blockchain ecosystem. ...

FinML-Chain: A Blockchain-Integrated Dataset for Enhanced Financial Machine Learning ArXiv ID: 2411.16277 “View on arXiv” Authors: Unknown Abstract Machine learning is critical for innovation and efficiency in financial markets, offering predictive models and data-driven decision-making. However, challenges such as missing data, lack of transparency, untimely updates, insecurity, and incompatible data sources limit its effectiveness. Blockchain technology, with its transparency, immutability, and real-time updates, addresses these challenges. We present a framework for integrating high-frequency on-chain data with low-frequency off-chain data, providing a benchmark for addressing novel research questions in economic mechanism design. This framework generates modular, extensible datasets for analyzing economic mechanisms such as the Transaction Fee Mechanism, enabling multi-modal insights and fairness-driven evaluations. Using four machine learning techniques, including linear regression, deep neural networks, XGBoost, and LSTM models, we demonstrate the framework’s ability to produce datasets that advance financial research and improve understanding of blockchain-driven systems. Our contributions include: (1) proposing a research scenario for the Transaction Fee Mechanism and demonstrating how the framework addresses previously unexplored questions in economic mechanism design; (2) providing a benchmark for financial machine learning by open-sourcing a sample dataset generated by the framework and the code for the pipeline, enabling continuous dataset expansion; and (3) promoting reproducibility, transparency, and collaboration by fully open-sourcing the framework and its outputs. This initiative supports researchers in extending our work and developing innovative financial machine-learning models, fostering advancements at the intersection of machine learning, blockchain, and economics. ...

Advancing DeFi Analytics: Efficiency Analysis with Decentralized Exchanges Comparison Service ArXiv ID: 2411.01950 “View on arXiv” Authors: Unknown Abstract This empirical study presents the Decentralized Exchanges Comparison Service (DECS), a novel tool developed by 1inch Analytics to assess exchange efficiency in decentralized finance. The DECS utilizes swap transaction monitoring and simulation techniques to provide unbiased comparisons of swap rates across various DEXes and aggregators. Analysis of almost 1.2 million transactions across multiple blockchain networks demonstrates that both 1inch Classic and 1inch Fusion consistently outperform competitors. These findings not only validate 1inch’s superior rates but also provide valuable insights for continuous protocol optimization and underscore the critical role of data-driven decision-making in advancing DeFi infrastructure. ...

Interpool: a liquidity pool designed for interoperability that mints, exchanges, and burns ArXiv ID: 2410.00011 “View on arXiv” Authors: Unknown Abstract The lack of proper interoperability poses a significant challenge in leveraging use cases within the blockchain industry. Unlike typical solutions that rely on third parties such as oracles and witnesses, the interpool design operates as a standalone solution that mints, exchanges, and burns (MEB) within the same liquidity pool. This MEB approach ensures that minting is backed by the locked capital supplied by liquidity providers. During the exchange process, the order of transactions in the mempool is optimized to maximize returns, effectively transforming the front-running issue into a solution that forges an external blockchain hash. This forged hash enables a novel protocol, Listrack (Listen and Track), which ensures that ultimate liquidity is always enforced through a solid burning procedure, strengthening a trustless design. Supported by Listrack, atomic swaps become feasible even outside the interpool, thereby enhancing the current design into a comprehensive interoperability solution ...

Global Public Sentiment on Decentralized Finance: A Spatiotemporal Analysis of Geo-tagged Tweets from 150 Countries ArXiv ID: 2409.00843 “View on arXiv” Authors: Unknown Abstract Blockchain technology and decentralized finance (DeFi) are reshaping global financial systems. Despite their impact, the spatial distribution of public sentiment and its economic and geopolitical determinants are often overlooked. This study analyzes over 150 million geo-tagged, DeFi-related tweets from 2012 to 2022, sourced from a larger dataset of 7.4 billion tweets. Using sentiment scores from a BERT-based multilingual classification model, we integrated these tweets with economic and geopolitical data to create a multimodal dataset. Employing techniques like sentiment analysis, spatial econometrics, clustering, and topic modeling, we uncovered significant global variations in DeFi engagement and sentiment. Our findings indicate that economic development significantly influences DeFi engagement, particularly after 2015. Geographically weighted regression analysis revealed GDP per capita as a key predictor of DeFi tweet proportions, with its impact growing following major increases in cryptocurrency values such as bitcoin. While wealthier nations are more actively engaged in DeFi discourse, the lowest-income countries often discuss DeFi in terms of financial security and sudden wealth. Conversely, middle-income countries relate DeFi to social and religious themes, whereas high-income countries view it mainly as a speculative instrument or entertainment. This research advances interdisciplinary studies in computational social science and finance and supports open science by making our dataset and code available on GitHub, and providing a non-code workflow on the KNIME platform. These contributions enable a broad range of scholars to explore DeFi adoption and sentiment, aiding policymakers, regulators, and developers in promoting financial inclusion and responsible DeFi engagement globally. ...

CLVR Ordering of Transactions on AMMs ArXiv ID: 2408.02634 “View on arXiv” Authors: Unknown Abstract This paper introduces a trade ordering rule that aims to reduce intra-block price volatility in Automated Market Maker (AMM) powered decentralized exchanges. The ordering rule introduced here, Clever Look-ahead Volatility Reduction (CLVR), operates under the (common) framework in decentralized finance that allows some entities to observe trade requests before they are settled, assemble them into “blocks”, and order them as they like. On AMM exchanges, asset prices are continuously and transparently updated as a result of each trade and therefore, transaction order has high financial value. CLVR aims to order transactions for traders’ benefit. Our primary focus is intra-block price stability (minimizing volatility), which has two main benefits for traders: it reduces transaction failure rate and allows traders to receive closer prices to the reference price at which they submit their transactions accordingly. We show that CLVR constructs an ordering which approximately minimizes price volatility with a small computation cost and can be trivially verified externally. ...

Towards A Post-Quantum Cryptography in Blockchain I: Basic Review on Theoretical Cryptography and Quantum Information Theory ArXiv ID: 2407.18966 “View on arXiv” Authors: Unknown Abstract Recently, the invention of quantum computers was so revolutionary that they bring transformative challenges in a variety of fields, especially for the traditional cryptographic blockchain, and it may become a real thread for most of the cryptocurrencies in the market. That is, it becomes inevitable to consider to implement a post-quantum cryptography, which is also referred to as quantum-resistant cryptography, for attaining quantum resistance in blockchains. ...