Several works in the literature have focused on the analysis of key stylized facts of financial and cryptocurrency returns linked to fundamental problems of efficiency and predictability of financial and cryptocurrency markets, including heavy tails, absence of linear autocorrelations and volatility clustering. This paper provides a study of the above properties of Bitcoin and Ethereum markets using recently proposed robust, valid and statistically justified definitions of and methods for inference on market (in)efficiency, volatility clustering, and nonlinear dependence in return time series. In contrast to existing approaches, the inference methods used in the analysis are robust to heavy-tailedness, dependence and nonlinear dynamics of returns. The results of the study indicate that Bitcoin and Ethereum returns exhibit heavy tails, uncorrelatedness over time and volatility clustering largely similar to those in developed financial markets. The analysis has important implications for cryptocurrency pricing, market efficiency, econometric modeling, risk management, market participants and regulators.
Araz Zirar, Abdul Jabbar, Hannan Amoozad Mahdiraji
Smart contracts (SCs), appended to a blockchain, protect digital environments and their resources, processes, and structures, reducing mismatches between legal and actual rights and ownership. They enhance digital resilience by improving transparency, traceability, and trust in digital transactions. Utilising SCs requires businesses to adapt their models, revenue streams, and customer relationships. For small and medium-sized enterprises (SMEs), SCs present challenges, requiring proactive decision-making for their effective utilisation and the trade-offs involved. By employing the integrated multi-layer ISM-MICMAC-SWARA framework (Interpretive Structural Modelling, Cross-Impact Matrix Multiplication Applied to Classification, and Stepwise Weight Assessment Ratio Analysis), we explain the complex interrelationships among the challenges and propose mitigating risk management strategies. We identify technical limitations and human errors as key drivers, confidentiality and manipulation as linkage challenges, and fraud and hacking as dependence challenges. These findings highlight the interconnected nature of the challenges and their impact on SMEs, and we emphasise the need for targeted resilience strategies. Our research highlights the global dimension of SC adoption. When deploying SCs, SMEs must navigate international regulations, cross-border transactions, and cultural diversity. This global perspective informs smart contracts’ strategic, business, and organisational aspects. Our findings offer insights for academics, industry leaders, managers, and policymakers seeking to understand the potential and risks of adopting SCs in SMEs.
AbstractContemporary blockchain architectures face a critical impasse defined herein as the "Tetra-Lemma"—a four-dimensional optimization problem comprising decentralization, security, scalability, and thermodynamic sustainability. Proof-of-Work networks confront diminishing security budgets due to the exhaustion of block subsidies, while Proof-of-Stake systems risk validator centralization. This paper establishes a Unified Monetary-Supply Framework that resolves these structural conflicts by synthesizing the deterministic "Customized Halving" schedule with the probabilistic regeneration logic of the Proof of Rinne (PoR). We demonstrate that by enforcing a "Thermodynamic Statute of Limitations" on dormant assets, the protocol functions as a Non-Equilibrium Thermodynamic Engine. This architecture transforms entropic asset attrition—traditionally viewed as systemic loss—into a regenerative security budget. Using Rincoin as a case study, the model proves that a high-frequency blockchain can maintain a deflationary supply curve while anchoring the effective circulation at a permanent target equilibrium, offering a rigorous blueprint for a closed-loop, regenerative digital economy over a secular horizon. Key Quantitative Findings Asymptotic Convergence: While the effective circulating supply may experience a temporary peak (approx. 27 million RIN), the Dual-Layer Temporal Architecture ensures stabilization below the 21 million threshold (specifically converging to 20.88 million RIN). Perpetual Stability: Beyond the initial mining and transition phases (spanning 443–703 years), the PoR mechanism ensures the indefinite maintenance of the effective circulating supply. This transcends the finite lifecycle of traditional PoW assets by establishing a permanent, self-sustaining regenerative cycle. Thermodynamic Equilibrium: Mathematical verification of the "Golden Ratio" between Reserve, Unrecovered Loss, and Actual Circulation (approx. 77 : 70 : 21). Publication StatusThis manuscript (v1.6.1) serves as the foundational theoretical framework for the Rincoin protocol. Future iterations will formalize the consensus mechanisms required to govern these algorithmic parameters. Integrity & Provenance ArchitectureThe scientific integrity and existence of this document are secured by a Triple-Verification Layer: 1. Academic Provenance: Indexed via Zenodo (DOI: 10.5281/zenodo.17141922). 2. Thermodynamic Timestamping: Anchored to the Bitcoin blockchain via OpenTimestamps. 3. Identity Assurance: Digitally signed by the author via a third-party certification authority (GMO Sign). Note: Verification data and the "Certificate of Authenticity" are available in the supplementary files. CorrespondencePrimary Author: Michiru Tokino (also known as Aevust in the decentralized infrastructure community). Academic Inquiries: edu@aevust.org Community Governance: @aevustus (Discord) / @aevust (X/Telegram) Keywords: Rincoin, Proof of Rinne (PoR), non-equilibrium thermodynamic engine, phase transition of value, dual-layer architecture, customized halving, thermodynamic statute of limitations, regenerative crypto-economics, blockchain tetra-lemma.
The delisting of Binance USD (BUSD) constitutes a major regulatory intervention in the stablecoin market and provides a unique opportunity to examine how targeted regulation affects liquidity allocation, market concentration, and short-run systemic risk in crypto-asset markets. Using daily data for 2023 and a linear and nonlinear Local Projections event-study framework, this paper analyzes the dynamic market responses to the BUSD delisting across major stablecoins and cryptocurrencies. The results show that liquidity displaced from BUSD is reallocated primarily toward USDT and USDC, leading to a measurable increase in stablecoin market concentration, while decentralized and algorithmic stablecoins absorb only a limited share of the shock. At the same time, Bitcoin and Ethereum experience temporary liquidity contractions followed by a relatively rapid recovery, suggesting conditional resilience of core crypto-assets. Overall, the findings document how a regulatory-induced exit of a major stablecoin reshapes short-run market dynamics and concentration patterns, highlighting potential trade-offs between regulatory enforcement and market structure. The paper contributes to the literature by providing the first empirical analysis of the BUSD delisting and by illustrating the usefulness of Local Projections for studying regulatory shocks in cryptocurrency markets.
Matteo Loporchio, Damiano Di Francesco Maesa, Anna Bernasconi, Laura Ricci
Abstract The ERC-1155 standard introduced on the Ethereum blockchain allows for managing multiple tokens, both fungible and non-fungible, within a single contract. It also supports batch transfers, thereby reducing transaction costs and enabling a more efficient use of blockchain resources. To assess its impact and level of adoption, this paper presents a comprehensive analysis of the ERC-1155 token ecosystem. First, we examine the activity of ERC-1155 contracts and compare the evolution of transfer volumes with those of the two alternative most popular token management standards. Next, we model the economy of each ERC-1155 contract as a directed graph, where nodes represent users and edges denote token transfers. We then study the topological properties of such graphs, analyzing approximately 40,000 networks until the end of 2024. Results indicate that, within our dataset, the adoption of ERC-1155 is growing, although its functionalities are not being fully utilized. Additionally, about 60% of the networks exhibit a completely centralized topology, while the remaining ones are generally sparse and lack small-world characteristics. Finally, the degree distribution analysis shows that preferential attachment is only present in a minority of the networks and the graphs also display a mild disassortative behavior.
This paper examines the directional connectedness between the returns of Bitcoin and Ethereum and the supply of stablecoins across different market conditions. Using a Quantile Vector Autoregression (QVAR) model, we analyze daily log-returns of major cryptocurrencies and changes in stablecoin supply from January 2021 to November 2024, capturing dynamics at the 5th, 50th, and 95th quantiles. Our findings show that the Total Connectedness Index (TCI) nearly triples under extreme conditions, with Bitcoin and Ethereum transitioning from passive roles in normal periods to dominant transmitters of influence during downturns. Stablecoins behave heterogeneously across regimes, with roles varying significantly even within the same subclass. Tether exhibits state-dependent behavior, acting as a net receiver of shocks in most conditions but emerging as a transmitter during bull markets. We also assessed the impact of the Terra-LUNA collapse, revealing a regime shift in the transmission of shocks: connectedness rises under normal and negative conditions but declines in positive markets. These patterns suggest that, under certain conditions, major cryptocurrencies can influence stablecoin issuance in distinct ways, leading to asymmetric adjustments in supply across individual stablecoins and shaping liquidity dynamics throughout the ecosystem. While we do not attempt to model the underlying mechanisms behind these shifts, our results point to the importance of monitoring state-dependent relationships and recognizing the diverse behaviors of stablecoins. The findings motivate the development of regime-sensitive monitoring tools and support ongoing policy discussions around stablecoin design, issuance frameworks, and market transparency.
This dissertation explores how entrepreneurial and policy decisions shape the performance of decentralized digital platforms (DDPs). It shows that token governance affects fundraising success, public listings catalyze user growth and engagement by amplifying network effects, and global regulations shape token risk-return profiles. The findings highlight the need for regulatory clarity and careful market entry strategies by entrepreneurs.
The rise of Big Tech has created unprecedented concentrations of power. The scaling potential of the modern IT industry is leading to widespread monopolies. For technologies that serve society, a monopoly brings structural dependence, and gives their owners an almost unchallengeable power. To counteract this societal dependence, academia, industry, and society at large proposed various countermeasures to limit the power of technology providers. In this thesis, Paul van Vulpen compares these approaches. The goal is to maintain the benefits of technology while reducing societal dependence on a few powerful actors. This book investigates three approaches. First, software ecosystems outline the collaboration between various interrelated software actors. Second, blockchain and decentralized autonomous organizations offer radical approaches to rethink and decentralize IT governance structures. Finally, digital platform regulations address urgent societal issues that arise from concentrated platform power. The final section concludes that a delicate and organic approach is needed to IT governance. Excessive centralization creates structural risks, but full decentralization is neither practical nor beneficial. The thesis proposes a middle road: Federated Technology Governance (FTG). In FTG, central authority defines architecture, interoperability standards, and maintains the long-term vision. A wide variety of actors handle user interaction, implementation, and collaboration. This framework helps technology providers to create software ecosystems and safeguard the provision of societal benefit for public digital infrastructure. FTG supports the creation of sovereign cloud services, secure operating systems, and public large language models. Could it also be a road to enable technology to serve society and the common good?
Bitcoin Ordinals and inscriptions facilitate the on-chain storage of arbitrary data on the Bitcoin blockchain. In this study, we analyse the impact of inscriptions on the Bitcoin network. We find that inscriptions have significantly increased network activity, created additional demand for blockspace, and influenced Bitcoin’s fee market dynamics. Furthermore, we find that the rise of inscriptions coincided with an increased utilisation of Taproot, a notable increase in block size, and the longest sustained period of high blockspace utilisation in Bitcoin’s history. Our study shows that inscriptions have reshaped how Bitcoin’s blockchain is utilised and underscores the growing number of use cases beyond its original function as a peer-to-peer financial network.
Token economies offer a transformative solution to the enduring challenges of funding and coordinating public goods. Through blockchain-enabled mechanisms such as smart contracts, decentralized governance, and incentive-aligned tokens, communities can address traditional market failures in the provision of non-rivalrous and non-excludable resources. This chapter explores the theoretical foundations of public goods economics, analyzes innovative funding models like quadratic funding, retroactive public goods funding, augmented bonding curves, and emerging regenerative finance systems, and examines how blockchain-based systems can support decentralized, transparent, and scalable public goods provisioning. Drawing on real-world case studies, the chapter evaluates the strengths and limitations of token economies in this domain, highlighting both the promises and the complexities of decentralized coordination.
Bitcoin derivatives trading regularly exceeds $200 billion daily, yet participants must trust centralized exchanges-the same exchanges that have repeatedly failed, from BitMEX's regulatory crisis in 2020 to FTX's collapse in 2022. This paper provides the first comparative analysis of three approaches that enable long/short Bitcoin exposure without exchange custody: Discreet Log Contracts (DLCs), Stable Channels, and Stablesats (included as a custodial comparison). Each mechanism allows two parties to take opposite sides of BTC/USD price movements-one hedging (short), one speculating (leveraged long)-settled entirely in Bitcoin. We analyze the mechanism design, trust assumptions, and trade-offs of each approach. These are not stablecoins; they are bilateral derivatives contracts. They sacrifice liquidity and convenience-the cost of trustlessness-serving participants unwilling to accept exchange counterparty risk.
Francis Chigozie Emmanuel, Ogaziechi Tobechi Anold, Obidinma Christian Alozie, Ikenna Tonna Adiele
The global freelance economy has experienced rapid growth, yet existing payment and escrow systems remain constrained by structural inefficiencies inherent in both centralized fiat-based and decentralized cryptocurrency-based models. Centralized escrow systems, while widely adopted due to their regulatory compliance and usability, suffer from custodial opacity, information asymmetry, high transaction costs, and limited verifiability. Conversely, purely decentralized blockchain-based escrow systems offer transparency and trust-minimized execution through smart contracts but face barriers including cryptocurrency price volatility, limited fiat integration, steep technical learning curves, and inadequate dispute resolution mechanisms for subjective deliverables. This article, a hybrid escrow system integrates traditional fiat payment infrastructure with decentralized Ethereum-compatible smart contract execution. The system adopts a three-layer architecture comprising a centralized service layer, a middleware synchronization layer, and a decentralized execution layer. A Finite State Machine (FSM) model governs escrow state transitions across both fiat-funded and cryptocurrency-funded transactions, ensuring determinism, auditability, and consistency. The system further incorporates a human-in-the-loop dispute resolution framework anchored to blockchain execution, enabling fair and transparent adjudication of subjective conflicts. Evaluation results demonstrate that the proposed hybrid architecture successfully bridges the gap between traditional finance and decentralized systems. The system achieved 100% correct FSM state enforcement with zero unauthorized fund releases across all test scenarios. Fiat-funded contracts were synchronized to the blockchain with an average latency of 8.4 seconds, while cryptocurrency-funded contracts confirmed on-chain within a median of 3.2 seconds on the Polygon testnet. All three dispute resolution outcomes were correctly enforced on-chain within an average of 5.1 seconds following adjudication, and API response times remained below 420 milliseconds under concurrent user loads. An ablation study further confirmed that all three architectural layers are individually necessary, as removing any single layer degraded transparency, payment flexibility, dispute resolution capability, or user accessibility. This research contributes a scalable and adaptable hybrid escrow blueprint applicable to fintech development, digital labour platforms, and cross-border payment systems.
Why does a market structure built on radical transparency paradoxically foster the proliferation of low-quality assets? Open-source crypto markets make information public but not necessarily usable. We develop a model in which investors allocate scarce attention before deciding whether to verify project quality. Technical complexity reduces the informativeness of processed public disclosure, while narrative assets can build salience through attention feedback. As a result, complex projects may fail to enter the verification set even when they would be valuable conditional on evaluation. Financing then falls because visibility expands market reach but only screened projects convert attention into capital. The model delivers a transparency paradox: more public information need not improve allocation when investors cannot process it at scale. Low-dimensional narrative assets can crowd out high-quality innovation, generating a complexity trap. The results imply that disclosure policy may be ineffective when it increases information volume without improving processability. Market regulation requires disclosure to be standardized, machine-readable, and certifiable, so that public information can be converted into valuation-relevant signals.
This paper studies whether fast-settlement payment layers can replace secure baselayer blockchains in a search-theoretic monetary model. The Chain provides secure but costly and probabilistic settlement, while the Network provides instant, cost-free payments but exposes users to cyberattacks and requires sellers to incur adoption costs. In the Chain-only benchmark, buyers choose settlement intensity after bargaining. Because they do not internalize the full trade surplus, settlement intensity is inefficiently low, reducing trade efficiency and weakening the monetary value of tokens. Introducing the Network generates multiple payment equilibria. Under exogenous cyberattack risk, Chain and Network payments may coexist: the Network provides fast settlement and fallback liquidity when Chain settlement fails, while the Chain remains valuable for its security and universal acceptance. If cyberattack risk is sufficiently low, pure Network payments can arise, although pure Chain payments may also persist because Network acceptance is costly for sellers. When cyberattack risk is endogenous, broader Network adoption increases exposed balances and strengthens hackers’ incentives. This security externality weakens the Network’s value as fallback liquidity and eliminates the pure Network-payment equilibrium. The Chain, therefore, survives as a secure settlement anchor. The welfare analysis shows that Network adoption is not always welfare improving: its payment-efficiency gains must outweigh seller adoption costs and, under endogenous attacks, the resource costs of hacking. Fast-settlement layers can improve payment efficiency, but they do not generically replace secure base-layer settlement.
The article examines the current state and key developmental trends of the payment system of the Russian Federation under the conditions of financial sector digitalization and unprecedented external sanction pressure. The primary focus is placed on analyzing the performance of the National Payment Card System (NPCS) as a guarantor of the country’s economic stability and technological sovereignty. Based on statistical data, the dynamics of implementing “Mir” cards and the Faster Payments System (FPS) are considered, alongside a mathematical evaluation of the economic efficiency of transactional technologies for commercial enterprises. Key barriers in the sphere of cross-border settlements are identified, and perspective ways to overcome them are proposed, including the integration of the digital ruble and supranational distributed ledger technology platforms.
Stablecoins, cryptocurrencies engineered to maintain a stable value relative to fiat currencies, have become one of the fastest-growing segments of the digital asset ecosystem. While early research focused primarily on their role in cryptocurrency trading and decentralized finance, stablecoins are increasingly being used for real-world payments. One of the most notable developments in this transition is the emergence of stablecoin-linked payment cards, which allow consumers to spend digital dollars at traditional merchants through established card networks such as Visa and Mastercard. This paper documents the rapid growth of stablecoin card spending and examines its implications for payment infrastructure, merchant economics, consumer fee structures, and regulatory policy. Drawing on data from Artemis Analytics, industry reporting, and payment network disclosures, the analysis shows that monthly crypto-card transaction volumes expanded from approximately $100 million in early 2023 to more than $1.5 billion by late 2025, reaching an annualized spending rate exceeding $18 billion. The paper also examines how stablecoin cards alter fee dynamics for merchants and consumers, how traditional card networks have responded to blockchain-based payment instruments, and what regulatory and competitive implications may follow from continued adoption. Although still modest relative to the global payments market, the rapid expansion of stablecoin card usage suggests that stablecoins may be transitioning from speculative trading instruments into a new form of digital payment infrastructure.
Censorship resistance is widely viewed as a core attribute of distributed ledgers. Censorship resistance refers to the inability to selectively exclude technically valid but undesirable transactions from the blockchain. We examine blockchain censorship in a game-theoretic framework that allows for both primary and secondary censorship. The analysis identifies scenarios in which both inclusion and censorship equilibria can arise. Once an equilibrium with strategic secondary censorship is implemented, it may be hard to revert to inclusion: Censorship equilibria are perfectly coalition-proof if the negative impact of an undesirable transaction on block producers is sufficiently large. These results suggest an expanding role for research into methods shaping censorship resistance at the technical layer.
This bachelor thesis focuses on how insiders of the Solana ecosystem understand the success of decentralized finance (DeFi) projects and what factors they consider key to achieving it. The aim of the thesis is to identify and structure the main product, team, community, user, economic, and ecosystem dimensions that, according to respondents, collectively shape the success of DeFi projects on the Solana platform. The research is based on a literature review of DeFi and the specifics of the Solana ecosystem, as well as a qualitative survey based on eight semi-structured interviews with members of DeFi project teams and micro-influencers active in Solana DeFi. The data was analyzed using thematic analysis, which led to the identification of eleven main themes covering, among other things, product value and innovation, the role of the team and network, community and communication, UX/UI and onboarding, tokenomics and value distribution, security, integration and partnerships, and the influence of market cycles and narratives. The results show that success is not associated with a single isolated factor, but with a portfolio of interdependent dimensions, some of which are directly controlled by project creators and some of which are determined by the broader ecosystem and market context. The work provides a theoretical contribution in the form of a systematic framework of success factors for DeFi projects specifically in the Solana environment, as well as a practical contribution for creators, investors, and other actors, offering them a roadmap for designing, evaluating, and strategically managing DeFi projects on this platform.