Tokenomics

An Empirical Analysis of Scam Tokens on Ethereum Blockchain ArXiv ID: 2402.19399 “View on arXiv” Authors: Unknown Abstract This article presents an empirical investigation into the determinants of total revenue generated by counterfeit tokens on Uniswap. It offers a detailed overview of the counterfeit token fraud process, along with a systematic summary of characteristics associated with such fraudulent activities observed in Uniswap. The study primarily examines the relationship between revenue from counterfeit token scams and their defining characteristics, and analyzes the influence of market economic factors such as return on market capitalization and price return on Ethereum. Key findings include a significant increase in overall transactions of counterfeit tokens on their first day of fraud, and a rise in upfront fraud costs leading to corresponding increases in revenue. Furthermore, a negative correlation is identified between the total revenue of counterfeit tokens and the volatility of Ethereum market capitalization return, while price return volatility on Ethereum is found to have a positive impact on counterfeit token revenue, albeit requiring further investigation for a comprehensive understanding. Additionally, the number of subscribers for the real token correlates positively with the realized volume of scam tokens, indicating that a larger community following the legitimate token may inadvertently contribute to the visibility and success of counterfeit tokens. Conversely, the number of Telegram subscribers exhibits a negative impact on the realized volume of scam tokens, suggesting that a higher level of scrutiny or awareness within Telegram communities may act as a deterrent to fraudulent activities. Finally, the timing of when the scam token is introduced on the Ethereum blockchain may have a negative impact on its success. Notably, the cumulative amount scammed by only 42 counterfeit tokens amounted to almost 11214 Ether. ...

Decentralized Token Economy Theory (DeTEcT) ArXiv ID: 2309.12330 “View on arXiv” Authors: Unknown Abstract This paper presents a pioneering approach for simulation of economic activity, policy implementation, and pricing of goods in token economies. The paper proposes a formal analysis framework for wealth distribution analysis and simulation of interactions between economic participants in an economy. Using this framework, we define a mechanism for identifying prices that achieve the desired wealth distribution according to some metric, and stability of economic dynamics. The motivation to study tokenomics theory is the increasing use of tokenization, specifically in financial infrastructures, where designing token economies is in the forefront. Tokenomics theory establishes a quantitative framework for wealth distribution amongst economic participants and implements the algorithmic regulatory controls mechanism that reacts to changes in economic conditions. In our framework, we introduce a concept of tokenomic taxonomy where agents in the economy are categorized into agent types and interactions between them. This novel approach is motivated by having a generalized model of the macroeconomy with controls being implemented through interactions and policies. The existence of such controls allows us to measure and readjust the wealth dynamics in the economy to suit the desired objectives. ...

DecentralizedFinance: On Blockchain- and Smart Contract-Based Financial Markets ArXiv ID: ssrn-3843844 “View on arXiv” Authors: Unknown Abstract The term decentralized finance (DeFi) refers to an alternative financial infrastructure built on top of the Ethereum blockchain. DeFi uses smart contracts to cr Keywords: Decentralized Finance (DeFi), Smart Contracts, Blockchain, Ethereum, Tokenomics, Crypto Complexity vs Empirical Score Math Complexity: 1.0/10 Empirical Rigor: 2.0/10 Quadrant: Philosophers Why: The paper is a survey and introduction to DeFi architecture with conceptual frameworks and qualitative descriptions, containing no advanced mathematics, models, or statistical analysis, and it lacks backtest-ready data, implementation details, or empirical results. flowchart TD A["Research Goal:<br>Understanding DeFi Infrastructure"] --> B{"Methodology"}; B --> C["Data Collection:<br>Ethereum Blockchain Logs"]; B --> D["Analysis:<br>Smart Contract Code Review"]; C --> E["Computational Analysis:<br>Tokenomics & Gas Fee Models"]; D --> E; E --> F["Key Findings:<br>1. Automated Market Makers<br>2. Lending Protocols<br>3. Composability Risks"];

Decentralized Finance: On Blockchain- and Smart Contract-based Financial Markets ArXiv ID: ssrn-3571335 “View on arXiv” Authors: Unknown Abstract The term decentralized finance (DeFi) refers to an alternative financial infrastructure built on top of the Ethereum blockchain. DeFi uses smart contracts to cr Keywords: Decentralized Finance (DeFi), Smart Contracts, Blockchain, Ethereum, Tokenomics, Crypto Complexity vs Empirical Score Math Complexity: 2.5/10 Empirical Rigor: 3.0/10 Quadrant: Philosophers Why: The paper provides a conceptual framework and survey of DeFi architecture with minimal advanced mathematics, focusing on high-level descriptions rather than dense formulas. Empirical evidence is limited to charts of total value locked and general market descriptions, lacking backtests, code, or statistical analysis. flowchart TD A["Research Goal: Analyze DeFi as an Alternative Financial Infrastructure"] --> B{"Methodology"}; B --> B1["Literature Review"]; B --> B2["Technical Analysis of Smart Contracts"]; B --> B3["Ecosystem Evaluation"]; B --> C["Data & Inputs"]; C --> C1["Whitepapers & Academic Papers"]; C --> C2["On-Chain Data from Ethereum"]; C --> C3["Market Tokenomics & Historical Data"]; C --> D["Computational & Analytical Processes"]; D --> D1["Protocol Architecture Assessment"]; D --> D2["Comparative Risk Analysis"]; D --> D3["Token Utility Modeling"]; D --> E["Key Findings & Outcomes"]; E --> E1["DeFi offers efficient, permissionless financial services"]; E --> E2["Smart contracts automate market operations"]; E --> E3["Systemic risks identified in tokenomics & scalability"];