Abstract Over the last half-century, consumer research has often depicted scarcity as a dominant factor increasing price. But should we assume that scarcity’s upward pressure on price remains intact, in a world where novel forms of digital products proliferate? In this article, we propose that blockchain-encrypted digital goods, in particular, non-fungible tokens (NFTs), offer good reason to revisit this assumption. In this context, we argue and find that social value can outweigh intrinsic value as a determinant of willingness-to-pay. As a result, when scarcity threatens access to high levels of social value, its effect on price can be negative rather than positive—an inversion of a pattern typically observed for offline collectibles. Secondary data taken from the NFT platform Opensea and a set of experimental studies support this social value-based lens. Given these findings, we propose a research agenda to ground future work in this area. We also suggest that NFTs offer a laboratory in which past theories related to social value, scarcity, and price can be reconsidered and future theories developed, hopefully allowing consumer researchers to lead knowledge development in these domains over the next 50 years.
Federico Ast, William R. George, Jamilya Kamalova, Abeer Sharma · 5 authors
Decentralized justice is a novel approach to online dispute resolution based on blockchain, crowdsourcing and game theory for adjudicating claims in a neutral and efficient way. Since the launch of the first decentralized justice platform in 2018, the field has attracted wide interest both from practitioners and academics in Web3 and dispute resolution. The decentralized justice approach is based on the ideas of decentralization, economic incentives and a claim to fairness in its decisions. At the current stage of development, decentralized justice is facing a number of technical, market, legal and ethical challenges for further development. This paper provides a review of the short history of decentralized justice, addresses a number of recurrent topics and lays down a path for future exploration.
Despite recent market turmoil, distributed ledger technology (DLT) is expected to accelerate its transformation of the financial services industry. Assets made available for investment using DLT will extend beyond cryptocurrencies, non-fungible tokens (NFTs) and the like to embrace assets of all kinds, including equity and fixed income securities, loans, real estate and others that today generally are supported by highly fragmented legacy proprietary frameworks. DLT offers the prospect of a safer, more cost-efficient, more widely adopted operating environment across all types of assets and transactions. However, legal and regulatory frameworks for financial services have taken time to adapt to this sea change. While certain regulatory and legislative developments have grabbed headlines, less appreciated is the state of play of so-called ‘private law’. Private property law addresses ownership rights in digital assets as well as whether and how these rights may be asserted indirectly through intermediaries, requisites for transfer of ownership, rulesets for resolution of disputes regarding ownership and whether and how interests in such assets may be secured by collateral arrangements. More broadly, and more fundamentally, as the UK Law Commission has recently noted, ‘property law is default law’ and is particularly useful because, in principle, property rights ‘are recognised against the whole world, whereas other — personal — rights are recognised only against someone who has assumed a relevant legal duty’.1 This distinction is especially important where a party having responsibility for an asset becomes insolvent. Within individual legal systems, digital assets and methods for their transfer have struggled to integrate themselves with existing laws such as the law regarding property rights and laws addressing the impact of insolvency. Each legal system by and large has addressed this challenge in its own way and in its own time, complicating prospects for a broad, scalable take-up of DLT as a replacement for current inefficiencies and fragmentation as well as for new types of assets. This is likely to be especially problematic in the context of cross-border investments, holdings and dispositions — especially if the law of more than one jurisdiction might apply to the same investment. This paper argues that it is essential that legal systems grappling with digital assets are mindful of the risks and pitfalls of inconsistency with other legal systems and that in this respect consistent application of governing law and choice of forum especially should be considered. In particular, the efforts of the International Institute for the Unification of Private Law (UNIDROIT) should be supported in order to establish a conceptually sound set of principles for all jurisdictions to apply, regardless of the peculiarities of their respective legal systems.
Qinxu Ding, Daniel Liebau, Zhiguo Wang, Weibiao Xu
Decentralized Autonomous Organizations or DAOs are organizations governed by a set of pre-defined rules programmed as source code in smart contracts. Once implemented, a DAO can automatically execute tasks, coordinate, and facilitate decentralized decision-making, without any central authority. This new and emerging paradigm is still under development and has not been researched much until today. To our knowledge, the literature still lacks a comprehensive survey discussing DAOs and DAO governance. We conduct a systematic review of common characteristics, a DAO categorization, real-world DAO applications, DAO governance including voting schemes and dispute resolution mechanisms in DAOs to provide an initial overview. We anticipate that our work can provide useful insights and references for researchers and industrial practitioners who wish to delve deeper into this nascent area.
Financial markets are undergoing an unprecedented transformation. Technological advances have brought major improvements to the operations of financial services. While these advances promote improved accessibility and convenience, traditional finance shortcomings like lack of transparency and moral hazard frictions continue to plague centralized platforms, imposing societal costs. In this paper, we argue how these shortcomings and frictions are being mitigated by the decentralized finance (DeFi) ecosystem. We delve into the workings of smart contracts, the backbone of DeFi transactions, with an emphasis on those underpinning token exchange and lending services. We highlight the pros and cons of the novel form of decentralized governance introduced via the ownership of governance tokens. Despite its potential, the current DeFi infrastructure introduces operational risks to users, which we segment into five primary categories: consensus mechanisms, protocol, oracle, frontrunning, and systemic risks. We conclude by emphasizing the need for future research to focus on the scalability of existing blockchains, the improved design and interoperability of DeFi protocols, and the rigorous auditing of smart contracts.
This paper examines existing Web3.0 research published between 2003 and 2022. We uncover seven research themes that have been featured in previous research, as well as the key phrases associated with each theme, using a topic modeling procedure called Latent Dirichlet Allocation (LDA). We emphasize the interaction of research themes that contribute to the understanding of a variety of solutions, applications, and use cases, such as metaverse and Non-fungible tokens (NFT). We conclude by proposing an exploratory agenda for future research based on pioneering research in the fields of Blockchain, decentralized networks, smart contracts, and algorithms.
In this paper, we propose a fully decentralized and smart contract-based insurance protocol. We identify various issues in the Decentralized Finance (DeFi) insurance context and propose a solution to overcome these shortcomings. We introduce an economic model that allows for risk transfer without any external dependencies or centralized intermediaries. In particular, our proposal does not need any sort of subjective claim assessment, community voting or external data providers (oracles). Moreover, it solves the problem of over-insurance and proposes various ways to mitigate the capital inefficiencies usually seen with DeFi collateral. The work takes inspiration from peer-to-peer (P2P) insurance and collateralized debt obligations (CDO). We formally describe the protocol, assess its efficiency and key properties and present a reference implementation. Finally, we address limitations, extensions and ideas for further research.
This Chapter aims to analyse the intersection between crowdfunding and distributed ledger technologies (DLTs), including crypto-assets. In particular, it focuses on the main legislative developments on digital finance in an European level, exploring the regulatory treatment potentially applicable to new technologies in crowdfunding environments, especially under the framework of the Markets in Crypto-Assets (MiCA) and DLT Pilot Regime Regulations, currently under discussion. To do so, the first section of the Chapter covers the applications of DLT in crowdfunding platforms, whereas the second section is devoted to analyse crowdfunding products and, specifically, the correlation between equity crowdfunding and security token offerings. In spite of the initiatives to update the EU regime, the authors find that there still remains gaps and mis-matches in the legislative landscape, which threatens the development of digital markets with legal uncertainty.
Abstract The blockchain, a decentralized ledger system, has been considered a revolutionary technology to transform businesses, including the financial markets. As peer-to-peer (P2P) lending is also known for decentralization in the sense that individuals borrow from and lend to each other directly, bypassing traditional banks, we explore the possibility and benefits of blockchains in P2P lending. We first provide an economic analysis of existing P2P lending problems, including herding and platform-borrower collusion, with and without the blockchain mechanism. We note that, compared with the existing markets, blockchain-backed P2P lending is highly effective in privacy preservation and borrower quality distinction. Since the role of intermediaries is eliminated in the blockchain world, the chance of platform-borrower collusion is also minimized. Moreover, we show that borrowers and lenders can expect additional surplus when the origination fee in traditional P2P lending is replaced with a smaller tokenization cost and when borrowers present a more accurate financial incentive in a smart contract. With the smart contract, borrowers are allowed to propose optimal interest rates based on their creditworthiness and capacity of repayment while detailed personal information is not required. Additionally, we demonstrate that small investors’ surplus can be further enhanced due to the elimination of herding.
Om Naik, Nimai Patel, Sabir Ali Baba, Harshal Dalvi
Ride-hailing applications like Uber and Ola have gained immense popularity in India and across the globe as convenient alternatives to traditional modes of travel such as private vehicles which can be unaffordable many times due to rising fuel prices and maintenance cost etc., buses and trains which are crowded; and taxis and auto rickshaws which can deny you service at the driver's whim. The advancement in internet technology and affordable smartphones have made it convenient to book a ride through our smartphones in just a few clicks. However, the service has also brought with it a slew of other challenges like unpredictable surge-pricing and high intermediary fees. The current research into decentralized systems for vehicles is accelerating rapidly. Even then, implementing a decentralized ride-hailing platform proves to be a difficult challenge due to the inherently centralized nature of traditional ride-hailing systems. Blockchain and other similar decentralized technologies are an attractive choice for this architecture due to their immutability, transparency and fault tolerance. If implemented successfully, decentralization using blockchain technology would remove roadblocks along the way such as intermediary fees and surge charges by third parties as it would offer more transparency. This paper proposes a framework for developing a decentralized ride-hailing architecture implemented on the InterPlanetary File System (IPFS) and Ethereum blockchain platform.
Blockchain technology (BCT) enables the automated execution of smart contracts in peer-to-peer (P2P) energy trading. BCT-based P2P platforms allow the sharing, exchange and trade of energy among consumers or prosumers as peers, fostering the decarbonization, decentralization and digitalization of the energy industry. On the other hand, BCT-based P2P energy trading relies on the collection, storage and processing of a large amount of user data, posing interdisciplinary challenges, including user anonymity, privacy, the governance of BCT systems and the role of energy market players. First, this paper seeks to review the state of the art of European data protection law and regulations by focusing on BCT compliance with the General Data Protection Regulation (GDPR) of 2018. Second, it explores both the potentials and the challenges of BCT-based P2P energy trading from a legal–economic perspective. To do so, the paper adopts an interdisciplinary approach which intertwines both law and economics, by reviewing the recent literature on BCT and P2P energy trading. Findings have revealed that the deployment of BCT-based P2P energy trading is still in its pilot stage because of technology immaturity, data protection uncertainty, incomplete disintermediation and the lack of both user awareness and collaboration among market players. Drawing on the review, the paper also proposes a selection of solutions to foster the implementation of BCT-based P2P energy trading.
The world has been experiencing several crises recently, particularly on the social front. Therefore, new technologies have been adapted to provide the most diverse possible solutions, including crowdfunding platforms that concentrate on social projects. They have recently piqued the interest of investors and donors, particularly those based on blockchain technology, thanks to their ability to achieve reliability. Social crowdfunding platforms have developed new strategies for luring donations and investments. However, there is still a lack of development of these ideas and exploiting the benefits and services provided by blockchain technology properly. This paper presents blockchain technology in a socially oriented crowdfunding platform reward-based that aims to provide a transparent, secure, auditable, and efficient system. BELONG is the first leading platform that merged the ideas of crowdfunding, donations, and charitable investments with a type of blockchain-based token called Non-fungible tokens (NFTs). The goal is to create safe investment channels, and that is because of the dearth of studies on the idea of integrating NFTs into humanitarian, charitable, or social activities. It relies on two strategies for seeking funds; the bedrock on which all two are built is the NFT. This study intends to reach out to all societal stakeholders interested in this field. As a result, each strategy targets a specific category, including donors, investors, and individuals, to make funding opportunities available for everyone. A dedicated prototype, using Ethereum and Vuejs, is implemented to demonstrate the platform's feasibility.
Aim . The presented study aims to assess the impact of modern development trends on the sharing economy. Tasks. The authors analyze the development of the sharing economy across different periods; formulate and test hypotheses about the impact of technological and social trends on the development of the sharing economy; substantiate the division of the examined period into four stages; describe the revealed patterns using single factor regression models. Methods. The study includes four stages: data selection and processing, trend elimination and division of the analyzed stage into periods, verification of the formulated hypotheses for each of the periods, and quality control of the obtained models. The information basis of the study includes a list of thematic indexes calculated by the Indxx agency (USA). Results. During the identification of periods of development of the sharing economy, the influence of global events on the dynamics of the sharing economy is determined, which is confirmed by the dynamics of the values of the sharing economy index during the pandemic and postpandemic period. Testing of the hypothesis shows that the most significant factor for the development of the sharing economy is the development of fintech and decentralized finance. That said, in the period from October 2018 to December 2019, there is a correlation between the development of the sharing economy and companies whose activity is focused on generation Y. Conclusions. The revealed patterns confirm the leading role of digital technologies in the development of the sharing economy.
Decentralized Finance, or DeFi, is a financial ecosystem built on blockchain technology, aiming to recreate traditional financial services without the need for central authorities like banks or intermediaries. It is a growing ecosystem of financial applications and services built on blockchain technology. Unlike traditional finance, which relies on centralized institutions like banks, DeFi leverages peer-to-peer (P2P) networks to facilitate financial transactions. Traditional financial systems often leave individuals and communities, particularly those in developing economies or marginalized groups, excluded due to limited access, high transaction costs, and stringent regulations. Decentralized Finance (DeFi) emerges as a potential solution, leveraging blockchain technology to offer an alternative financial ecosystem built on transparency, disintermediation, and accessibility. This paper investigates the potential of DeFi in fostering financial inclusion and economic empowerment. DeFi has gained traction in India, with a growing interest in blockchain-based financial services. However, regulatory uncertainties have led to some cautiousness. Indian regulators are exploring frameworks to address potential risks while encouraging innovation in the DeFi space. As the regulatory landscape evolves, the adoption and development of DeFi in India are likely to be influenced by government policies and industry collaborations
Shuchih Ernest Chang, Erik Chiaway Chang, Yijou Chen
The ideas of the sharing economy have facilitated innovative business applications, such as Uber and Airbnb. As an example of a sharing economy application, ridesharing services take advantage of underutilized resources to create economic value. However, the unruly design of ridesharing systems may make urban traffic more congested and cause other technology-organization-environment issues. This study explores the application of blockchain and smart contract technologies to enhance ridesharing services by harvesting the blockchain benefits of transaction traceability, process transparency, system automation and disintermediation. After presenting system design and implementation details for building and deploying a blockchain-based system to support the reengineered ridesharing service with required business functions, we conduct functionality/performance tests and theory-based comparative analysis to confirm its feasibility and applicability. The results reveal that our system with blockchain-enabled benefits is superior to incumbent ridesharing systems. Moreover, while prior research rarely reports the design and implementation details of blockchain-based systems to support sharing economy services, this paper primarily contributes to extant literature by not only proposing a layered system architecture adapting blockchain and smart contracts into the desired ridesharing service but also demonstrating the design and implementation details, covering the development tools, the deployment environment and the deployed smart contracts.