Paolo Bottoni, Claudio Di Ciccio, Remo Pareschi, Domenico Tortola · 6 authors
Smart contracts show a high potential to make supply chain management strategies epochally leap towards higher levels of productivity, not only in the functioning of production processes but also in terms of product innovation and overall economic returns. This article illustrates the principle of Income Sharing as a highly performing economic strategy for supply chains with a natural implementation in blockchain smart contracts. It proposes a blockchain-based architecture that uses smart contracts to implement various algorithmic versions of the Income Sharing principle among companies participating in a supply chain. The formation of the total income and its consequent redistribution are calculated taking into account the role of the technological platform automating these procedures, which therefore becomes a party to the inter-company business project of a supply chain in the alternative roles, as feasible in business practice, of Blockchain-as-a-Service and Blockchain-as-a-Partner. The approach is implemented on Hyperledger Fabric, the most widespread platform for private and consortium blockchains. We compare and justify this design choice with the alternative given by public blockchains, with specific attention to Ethereum.
Purpose The study aims to investigate the impact of technological innovation, such as blockchain, in the music field from a value co-creation perspective, highlighting how it is determining a radical change in the business model and value creation process. Design/methodology/approach To shed light on how blockchain adoption is reconfiguring the music industry, the authors adopted a qualitative-based approach based on a case study, allowing us to investigate value co-creation at three levels (macro, meso and micro) through exchange and integration of multi-actor resources. Findings The authors found that blockchain adoption in the music industry can singularly shape the business model, representing a powerful tool to enhance inter-organizational cooperation in value creation. It effectively deals with operational and business issues, besides financial transactions, profoundly impacting both the creation and distribution of value within the supply chain. Research limitations/implications The research contributes to a better understanding of innovation adoption in a specific setting, the music industry, giving support and guidance for players working in this ecosystem. The blockchain-music link helps close the gap between music and society through technology, thus providing a foundation for future research. Originality/value The paper provides new insights into the antecedents and mechanisms of value co-creation, spanning macro-, meso-, and micro-levels of context. It also illustrates the factors underpinning Bitsong viability to embed the value co-creation perspective in designing the business model within a value network.
A. F. M. Shahen Shah, Muhammet Ali Karabulut, A. F. M. Suaib Akhter, Nazifa Mustari · 7 authors
Cryptocurrencies acquire user confidence by making the whole creation and transaction history transparent to the public. In exchange, the transaction history accurately captures the complete range of user activities related to cryptocurrencies. It is thought to be one of the safest and simplest payment methods that may be employed in the future. The trend of banks and other financial institutions investing in cryptocurrencies has increased rapidly in recent years. Therefore, it is necessary to synthesize the findings of previous studies on cryptocurrencies. In this paper, the use of data mining methods in Bitcoin transactions is analyzed and summarized. Cryptocurrencies, similar to the well-known Bitcoin, were targeted to ensure transaction security and privacy and overcome the drawbacks of traditional banking systems as well as other centralized systems. In addition, a comprehensive analysis of the literature on the challenges and applications of electronic currencies is conducted. The evolution of digital currency from electronic cash to cryptocurrencies is summarized and the methods used to increase user privacy are highlighted. The security threats in existing cryptocurrency systems (that compromise the privacy of Bitcoin users) are also highlighted. Finally, several research gaps and trends are identified that need to be further explored.
The set of services by Decentralized Finance (DeFi) and by traditional finance intersects. Loans are examples of the intersection. Data scientists have no access to the loan data of the traditional banking system due to trade secrecy and client privacy reasons. Also, banks’ operation is well regulated. Modern DeFi loan data is openly available in public blockchains the corresponding projects operate in. But the problem is to represent DeFi’s conveniently for analysis. At the same time, DeFis are unregulated. In the paper, we consider a decentralized Ethereum protocol to lend and borrow assets called Compound. We design a relational database, fill it with the project’s data, and provide statistical details. The results help overcome the entering threshold for further data analysis.
Erik Schüler, Clair Lemos, Genizia Islabão de Islabão
A modalidade de negócio de franquia é norteada pelo contrato, o qual regula a relação entre franqueador e franqueado. Por vezes, em função da ocorrência de assimetria de informação ou incorreto cumprimento das cláusulas contratuais acordadas, conflitos na relação entre os envolvidos são gerados. A automatização de contratos, na forma de smart contracts, é uma das possibilidades já relatadas para a solução de alguns dos aspectos envolvendo a relação entre as partes. Este artigo traz os resultados de uma primeira etapa de um projeto constituído de duas etapas, cujo objetivo é demonstrar a aplicabilidade de smart contracts instanciados em blockchain para o controle e monitoramento de cláusulas específicas de contratos de franquias. Ao contrário de documentos reportados na literatura, os resultados apresentados neste artigo baseiam-se na análise de um tipo específico de um contrato real de franquia, identificando-se quais cláusulas apresentam possibilidade do controle e monitoramento automatizado através de smart contract, e propondo-se uma classificação destas cláusulas quanto às possíveis formas de realização destas ações. Resultados indicam, para o contrato analisado, que pouco menos da metade das cláusulas são passíveis de serem implementadas em smart contract, existindo ainda a possibilidade da exclusão de outras cláusulas, uma vez que se garante a correta execução de outras cláusulas.
Transaction fee markets are essential components of blockchain economies, as they resolve the inherent scarcity in the number of transactions that can be added to each block. In early blockchain protocols, this scarcity was resolved through a first-price auction in which users were forced to guess appropriate bids from recent blockchain data. Ethereum's EIP-1559 fee market reform streamlines this process through the use of a base fee that is increased (or decreased) whenever a block exceeds (or fails to meet) a specified target block size. Previous work has found that the EIP-1559 mechanism may lead to a base fee process that is inherently chaotic, in which case the base fee does not converge to a fixed point even under ideal conditions. However, the impact of this chaotic behavior on the fee market's main design goal -- blocks whose long-term average size equals the target -- has not previously been explored. As our main contribution, we derive near-optimal upper and lower bounds for the time-average block size in the EIP-1559 mechanism despite its possibly chaotic evolution. Our lower bound is equal to the target utilization level whereas our upper bound is approximately 6% higher than optimal. Empirical evidence is shown in great agreement with these theoretical predictions. Specifically, the historical average was approximately 2.9% larger than the target rage under Proof-of-Work and decreased to approximately 2.0% after Ethereum's transition to Proof-of-Stake. We also find that an approximate version of EIP-1559 achieves optimality even in the absence of convergence.
Peter Eklund, Jonas Sveistrup Søgaard, Lasse Herskind, jason Spasovski
This paper examines the feasibility of blockchain solutions for national and transnational business-to-business and business-to-government (B2B/B2G) compliance frameworks, namely a trust-less, de-centralised, self-regulating distributed ledger. In particular, the paper examines whether blockchain platforms scale to support national and transnational e-business trading.
Decentralized finance (DeFi) is known for its unique mechanism design, which applies smart contracts to facilitate peer-to-peer transactions. The decentralized bank is a typical DeFi application. Ideally, a decentralized bank should be decentralized in the transaction. However, many recent studies have found that decentralized banks have not achieved a significant degree of decentralization. This research conducts a comparative study among mainstream decentralized banks. We apply core-periphery network features analysis using the transaction data from four decentralized banks, Liquity, Aave, MakerDao, and Compound. We extract six features and compare the banks' levels of decentralization cross-sectionally. According to the analysis results, we find that: 1) MakerDao and Compound are more decentralized in the transactions than Aave and Liquity. 2) Although decentralized banking transactions are supposed to be decentralized, the data show that four banks have primary external transaction core addresses such as Huobi, Coinbase, and Binance, etc. We also discuss four design features that might affect network decentralization. Our research contributes to the literature at the interface of decentralized finance, financial technology (Fintech), and social network analysis and inspires future protocol designs to live up to the promise of decentralized finance for a truly peer-to-peer transaction network.
Ingrid Bauer, Rafael Ziolkowski, Janine Hacker, Gerhard Schwabe
Despite the large number of resources that blockchain has, and continues to mobilize, what makes the technology unique and why people engage with it is not yet fully understood. Hence, “Why blockchain?” is a question that many scientists and managers still ask themselves or must to answer when facing the technology's critics. While the question is undoubtedly justified, it cannot always be answered from a purely technical perspective. Thus, in this study, we apply a socio-technical information systems artifact perspective and analyze the reasons managers involved in the blockchain consortia have for using blockchain technology. Based on a multiple-case study of 19 blockchain consortia, including interviews with 53 stakeholders, we explicate 19 different motives that justify engagement with the technology in practice. Further, we identify the systemic character of tokenization and the importance of the socio-technical interplay of aspects like power decentralization that justify the necessity of blockchain.
Omar Ali, Mujtaba Momin, Anup Shrestha, Ronnie Das · 6 authors
The nonfungible token (NFT) marketplace spiked in the recent past. The concept originated initially as a token standard of Ethereum, an open-source blockchain with smart contract functionality, where each token is characterized by distinguishable signs. These types of tokens have unique digital properties that allow their distinct identification. NFTs, with their distinct qualities, can be fluidly traded with customized values according to their ages, rarity, and liquidity. The trading of NFTs has heavily influenced the growth of the decentralized application (dApp) marketplace, as exponential returns (thousand folds from their original value) on its ever-expanding market are being observed, leading to worldwide attention. However, the NFT ecosystem is in its nascence, and the associated technologies are still in their infancy. New researchers might be fascinated with the exponential, yet nebulous evolution of NFTs; however, this novelty has contributed to the paucity of systematic and conclusive published research work on this topic. This review portrays the NFT ecosystem multidimensionally, wherein the paper commences with an overview of state-of-the-art NFT technology and furnishes summary standards and desired properties. Finally, the study concludes with an elaborate discussion of the future outlook for and prime challenges faced by NFTs.
In this paper, we investigate some economic fundamentals related to the Tezos blockchain platform under the Emmy* consensus protocol. The protocol is based on a liquid version of Proof-of-Stake, in the sense that users can temporarily delegate some or all of their Tz units to full nodes. In addition to increasing the stake of the full node, and thus the probability of being selected as a block baker/endorser, such delegation induces the property of the super-additivity of users’ selection probability of baking/endorsing a block. That is, with delegation, the selection probability may be larger than the sum of the selection probabilities without delegation. In this paper, we study how monetary holdings and stakes can evolve with time, also discussing the individual user and the market implications of delegation.
Nov 15, 2022·Zeitschrift für schweizerische Statistik und Volkswirtschaft/Schweizerische Zeitschrift für Volkswirtschaft und Statistik/Swiss journal of economics and statistics
Basil Guggenheim, Sébastien Kraenzlin, Christoph Meyer
Abstract We use unique individual bank-to-bank repo transaction data to empirically assess the efficiency of the existing Swiss financial market infrastructure (FMI) for executing delivery versus payment transactions. This approach enables us to identify its current benefits and drawbacks as well as where new technologies, such as distributed ledger technology, could provide a remedy. We find that the fastest settlement time for repo transactions is 12 s, but that settlements are often delayed by more than 10 min due to the lack of collateral availability. We conclude that the cross-border availability of securities needs to be addressed by either improving interoperability of existing infrastructures or using new technologies.
Play-to-earn is one of the prospective categories of decentralized applications. The play-to-earn projects combine blockchain technology with entertaining games and finance, attracting various participants. While huge amounts of capital have been poured into these projects, the new crypto niche is considered controversial, and the traditional gaming industry is hesitant to embrace blockchain technology. In addition, there is little systematic research on these projects. In this paper, we delineate play-to-earn projects in terms of economic & governance models and implementation and analyze how blockchain technology can benefit these projects by providing system robustness, transparency, composability, and decentralized governance. We begin by identifying the participants and characterizing the tokens, which are products of composability. We then summarize the roadmap and governance model to exposit there is a transition from centralized governance to decentralized governance. We also classify the implementation of the play-to-earn projects with different extents of robustness and transparency. Finally, we discuss the security & societal challenges for future research in terms of possible attacks, the economics of tokens, and governance.
A tecnologia blockchain possibilita a implementação de contratos inteligentes que expressam na forma de código as cláusulas de contratos do mundo real de modo a serem executadas sem a necessidade de um intermediário. Nesse contexto, foram introduzidas as aplicações decentralizadas (DApps) que utilizam recursos, como imutabilidade, descentralização, transparência e privacidade. Contudo, o desenvolvimento de DApps é limitado ao escopo de contratos e às especificidades da blockchain. Os desenvolvedores necessitam compreender todo o ambiente inerente à tecnologia, como questões da linguagem de programação dos contratos, questões de segurança e outros. O objetivo deste artigo é definir um metamodelo que facilite tanto para os especialistas do domínio quanto para desenvolvedores a modelagem dos contratos em alto nível. A proposta consiste em um metamodelo que abstraia as questões técnicas inerentes a Ethereum Virtual Machine (EVM) que permita definir os elementos essenciais que devem ser implementados no contrato final.
Blockchain protocols’ main differentiator is their purported decentralization that unlocks various information technology applications that were supposedly impossible beforehand. The key promise is that incentive-driven participation of a large set of interested parties can lead to decentralized protocol states where no single operator can be a “single point of failure.” Despite this promise, there is little systematic analysis of decentralization in blockchain systems and the sporadic theoretic and empirical investigations that exist paint a rather negative picture due to resource “pooling behaviors” that are impossible to prevent in the “permissionless” setting of such protocols where parties have no designated identities.
The always-available liquidity of automated market makers (AMMs) has been one of the most important catalysts in early cryptocurrency adoption. However, it has become increasingly evident that AMMs in their current form are not viable investment options for passive liquidity providers. This is large part due to the cost incurred by AMMs providing stale prices to arbitrageurs against external market prices, formalized as loss-versus-rebalancing (LVR) [Milionis et al., 2022]. In this paper, we present Diamond, an automated market making protocol that aligns the incentives of liquidity providers and block producers in the protocol-level retention of LVR. In Diamond, block producers effectively auction the right to capture any arbitrage that exists between the external market price of a Diamond pool, and the price of the pool itself. The proceeds of these auctions are shared by the Diamond pool and block producer in a way that is proven to remain incentive compatible for the block producer. Given the participation of competing arbitrageurs to capture LVR, LVR is minimized in Diamond. We formally prove this result, and detail an implementation of Diamond. We also provide comparative simulations of Diamond to relevant benchmarks, further evidencing the LVR-protection capabilities of Diamond. With this new protection, passive liquidity provision on blockchains can become rationally viable, beckoning a new age for decentralized finance.
In recent years, the volume of data generated by IoT devices has increased dramatically. Using this data can improve decision-making in the public and private sectors and increase productivity. Many attempts have been made to enhance and adapt businesses to exploit this IoT data. Among these, IoT data trading is the most popular approach. To this end, ongoing projects are currently focused on developing decentralized data marketplaces for IoT using blockchain and cryptocurrencies. Here we explore how a decentralized data marketplace could be created using IOTA tangle and IOTA smart contract chains (SC chains). We also consider the advantages of such architecture in terms of cost, scalability, and privacy over current designs and introduce the various elements it should have.
Abstract Many types of cryptocurrencies, which predominantly utilize blockchain technology, have emerged worldwide. Several issuers plan to circulate their original cryptocurrencies for monetary use. This study investigates whether issuers can stimulate cryptocurrencies to attain a monetary function. We use a multi-agent model, referred to as the Yasutomi model, which simulates the emergence of money. We analyze two scenarios that may result from the actions taken by the issuer. These scenarios focus on increases in the number of stores that accept cryptocurrency payments and situations whereby the cryptocurrency issuer designs the cryptocurrency to be attractive to people and conducts an airdrop. We find that a cryptocurrency can attain a monetary function in two cases. One such case occurs when 20% of all agents accept the cryptocurrency for payment and 50% of the agents are aware of this fact. The second case occurs when the issuer continuously airdrops a cryptocurrency to a specific person while maintaining the total volume of the cryptocurrency within a range that prevents it from losing its attractiveness.
Towards a Decentralized Literature. The purpose of this paper is to discuss how the History of Contemporary Romanian Literature by Mihai Iovănel opens new paths both in interpreting literature and towards understanding Romanian cultural identity at large. In this sense, “transnational specificity,” as Iovănel calls it, becomes a most resourceful field that allows, as Vancea shows, important insights into national and global identity in the context of significant technological developments. In the same vein, Vancea draws from Daniel David’s work on the psychology of the Romanian people to highlight new cultural aspects that could lead to changes in literature. At the same time, the paper tries to bring humanities closer to the perspectives that the Web3 phenomenon announce. Article history: Received 22 May 2022; Revised 25 August 2022; Accepted 31 August 2022; Available online 20 September 2022; Available print 30 September 2022 REZUMAT. Către o literatură descentralizată. Scopul acestei lucrări este de a evidenția modul în care Istoria Literaturii Române Contemporane scrisă de Mihai Iovănel deschide noi căi de interpretare a literaturii, dar și a identității culturale. Specificul transnațional devine în acest sens un teren ofertant care permite deschiderea unei discuții mai largi cu privire la identitatea noastră națională și globală în contextul profundei dezvoltări tehnologice. În acest sens, voi completa exemplele menționate de criticul literar cu studiul lui Daniel David despre psihologia poporului român pentru a evidenția noi puncte vulnerabile care ar putea să determine schimbări în viitorul apropiat al literaturii. Totodată, lucrarea încearcă să apropie umanioarele de perspectivele pe care le aduce în viitor fenomenul Web3. Cuvinte-cheie: identitate culturală, literatura descentralizată, Web3, istorie literară, NFT
Christoph Müller-Bloch, Jonas Valbjørn Andersen, Jason Spasovski, Jungpil Hahn
Blockchain systems allow for securely keeping shared records of transactions in a decentralised way. This is enabled by algorithms called consensus mechanisms. Proof-of-work is the most prominent consensus mechanism, but environmentally unsustainable. Here, we focus on proof-of-stake, its best-known alternative. Importantly, decentralised decision-making power is not an inherent feature of blockchain systems, but a technological possibility. Numerous security incidents illustrate that decentralised control cannot be taken for granted. We therefore study how key parameters affect the degree of decentralisation in proof-of-stake blockchain systems. Based on a real-world implementation of a proof-of-stake blockchain system, we conduct agent-based simulations to study how a range of parameters impact decentralisation. The results suggest that high numbers of initial potential validator nodes, large transactions, a high number of transactions, and a very high or very low positive validator network growth rate increase decentralisation. We find weak support for an impact of changes in transaction fees and initial stake distributions. Our study highlights how blockchain challenges our understanding of decentralisation in information systems research, and contributes to understanding the governance mechanisms that lead to decentralisation in proof-of-stake blockchain systems as well as to designing proof-of-stake blockchain systems that are prone to decentralisation and therefore more secure.
Abstract This study suggests a payment portfolio model that includes new payment methods that have emerged from the development of cryptocurrency markets and central bank digital currencies (CBDCs). Our model analyzes the optimal payment choice for consumers under various macroeconomic conditions. We determine that an individual economic agent chooses payment methods under specific conditions by incorporating policy interest rates on CBDCs and stablecoins used on cryptocurrency exchanges. We analyze the impacts of CBDCs and stablecoins on the choice of whether to use cash or deposits. We also examine how the agent changes her portfolio compositions in response to exogenous macroeconomic policies. If a government replaces cash with a CBDC, the convenience of digital currency would not affect consumer choices. The higher the government’s interest rate on CBDCs, the more consumers will use CBDCs than deposits.
Despite its many potential economic and organisational benefits, enterprise blockchain (distributed ledger) technology has still not been widely adopted. From the viewpoint of the participants, the deployment of a blockchain that links collaborating enterprises requires value creation that will exceed investment, including investment in operational and strategic change. The theory behind and practice of cross-enterprise open innovation can inform blockchain adoption. Blockchain implementation requires and creates interdependencies across collaborators, both among enterprise consortium partners and with stakeholders in the broader ecosystem. Distinguished from arm’s-length forms of collaboration, interdependencies occur when organisations intentionally collaborate to become reliant upon one another. In this paper, we develop a framework of blockchain interdependencies and explore key factors that promote or inhibit interdependence. We propose a blockchain collaboration continuum with three levels: cooperation, interdependence, and mutualism. We then explore factors that influence the level of interdependence: two types of consortium-level interdependencies—socio-technical and economic, and two types of ecosystem-level interdependencies—standards and legal/regulatory. We illustrate these interdependencies and their payoffs through the example of supply chains in maritime trade. This work can be used as a starting point for diagnosing critical factors influencing adoption and for illuminating points of leverage that may sway hesitant organisations to participate in blockchain consortia.