Blockchain Papers

Xiaotong Sun

No abstract is available for this record.

Kentaro Sako, Shin’ichiro Matsuo, Sachin Meier

Fairness is an important trait of open, free markets. Ethereum is a platform meant to enable digital, decentralized markets. Though many researchers debate the market's fairness, there are few discussions around the fairness of automated markets, such as those hosted on Ethereum. In this paper, using pilot studies, we consider unfair factors caused by adding the program. Because CryptoKitties is one of the major blockchain-based games and has been in operation for an extended period of time, we focus on its market to examine fairness. As a result, we concluded that a gene determination algorithm in this game has little randomness, and a significant advantage to gain profit is given to players who know its bias over those who do not. We state incompleteness and impact of the algorithm and other factors. Besides, we suppose countermeasures to reduce CryptoKitties' unfairness as a market.

John Crawford, Lev Menand, Morgan Ricks

We are entering a new monetary era. Central banks around the world— spurred by the development of privately controlled digital currencies as well as competition from other central banks—have been studying, building, and, in some cases, issuing central bank digital currency (“CBDC”). Although digital fiat currency is one of the hottest topics in macroeconomics and central banking today, the discussion has largely overlooked the most straightforward and appealing strategy for implementing a U.S. dollar-based CBDC: expanding access to bank accounts that the Federal Reserve already offers to a small, favored set of clients. These accounts consist of entries in a digital ledger—like other digital currencies—and are extremely desirable, offering high interest, instant payments, and full government backing with no limit. But U.S. law restricts these accounts to an exclusive clientele consisting primarily of banks. Privileged access to these accounts creates a striking asymmetry at the core of our monetary framework: government-issued physical currency is available to all, but government-issued digital currency (in the form of central bank accounts) is not. This dichotomy is unwarranted. Congress should authorize the Federal Reserve to give everyone—individuals, businesses, and institutions—the option to maintain accounts at the central bank. We call these accounts FedAccounts. Unlike the CBDC approaches currently under discussion, which would use complicated and inefficient distributed ledger technology and be walled off from the existing system of money and payments, FedAccounts would be seamlessly interoperable with the mainstream payment system, relying on technologies that the Federal Reserve has used for decades.

Dirk Andreas Zetzsche, Linn Anker-Sørensen, Maria Lucia Passador, Andreas Wehrli

Financial law and regulation have, to date, assumed that regulated activities and functions are concentrated in a single legal entity responsible and accountable for operations and compliance. Even with regard to financial market infrastructure where the regulatory perspective acknowledges the need for interoperability of many entities as a system, each entity is subject to its own rules and regulations, and can thus meet its own compliance requirements independent of other system participants. The entity-focused regulatory paradigm is under pressure in the world of DLT-based payment arrangements where some ledgers, and thus the performance of the services as such, are distributed. DLT arrangements could provide an alternative to the traditional reliance on a mutually trusted central entity to transfer funds and enable the creation of new foundational infrastructures by distributing technical functions or linking existing systems. As such, we identify and outline concepts for use cases where DLT is potentially improving the efficiency of cross-border payments, namely a Best Execution DLT, a DLT application for a Network of Central Banks, a DLT as an AML/KYC utility, as well as DLT arrangements for an Identity Platform, a Small Payments Platform and, finally, an Interoperability Platform connecting multiple closed-loop and proprietary banking systems. Despite the wide-ranging interest in DLT-based payment systems, research so far has focused on technical concepts and lacked legal details. This article seeks to fill this gap by providing an initial analysis of the legal challenges related to DLT-based payment systems. From a legal perspective, the distribution of functions in DLTs comes with new risks created from the joint performance of services and functions as main characteristic of a distributed ledger, and the need for additional agreements, ongoing coordination across, and governance arrangements among the nodes. Further, in a cross-border context, multiple regulators and courts of various countries (asking for compliance with their own set of rules and regular reporting) will be involved. All of these must decide whether for compliance with any single rule they look at the DLT as a whole (herein called ‘the ledger perspective’) or each individual node (that is each institution participating in the DLT, herein called ‘the node perspective’). Moreover, financial and private law must provide for risk allocation, liability, responsibility and accountability for all legal obligations related to each function and activity. This article examines the extent to which the ledger perspective or the node perspective should prevail against the backdrop of a range of DLT use cases, resulting in policy recommendations for regulators. In this article, we propose the adoption of what we call an enabling approach for payment systems: ledger operators must specify in a Plan of Operations subject to regulatory approval to which rights and obligations the ledger perspective applies; in the absence of such a stipulation, rules apply based on the node perspective. However, for systemic risk controls, AML/CFT, data protection and governance, as well as DLT governance, we propose a reversed default rule in which the ledger perspective prevails in the absence of rules stipulating that the node perspective applies. Finally, in private law matters, we propose protecting consumers and SME clients through a standardised payment services contract structure, without mandating details.

Craig Calcaterra, Wulf A. Kaal

No abstract is available for this record.

Samuel Häfner

No abstract is available for this record.

Dionysis Xenakis, Anastasia Tsiota, Christos-Thrasyvoulos Koulis, Christos Xenakis · 5 authors

The new “status quo” created by the emerging integration of Multi-Access Edge Computing (MEC) and Radio Access Network (RAN) infrastructures, combined with the openness of the 5G service market, have set new standards on how the multitude of 5G service domains should be incentivized and coordinated to comply with the performance requirements set on a per session basis. In this paper, we revisit the predominant offline contract-driven mobile data access model enabling users to gain access to the infrastructure of only a few network operators and propose a new blockchain-backed mobile data access model where the key 5G stakeholders can trade, share and consume mobile edge network assets (access to the internet, spectrum, processing, storage, local content etc.) in a fully decentralized, anonymous and highly-robust fashion. Blockchain-backed mobile data access should address critical practical challenges of blockchain decentralization, scalability and security in the context of 5G and Beyond networks. Accordingly, we provide a meticulous survey of existing solutions in the aforementioned three areas and present a comprehensive holistic framework of protocols to address the key challenges identified, including a delegated Proof-of-Stake (DPoS) for distributed blockchain consensus over 5G and Beyond mobile data networks, a future-proof smart-contract enabled payment relay service enabling instant off-chain payments in a highly robust fashion as well as a hybrid mixing protocol that enables payment relays to act as anonymous payment hubs while addressing the unique challenges opposed by the joint blockchain and network level interaction of the 5G and Beyond service components. A wide range of practical implications and mitigation measures for dishonest operation of the blockchain nodes are investigated and sophisticated yet highly-robust incentive engineering mechanisms are derived. Detailed numerical results also accompany the paper, bringing to light the unique performance trade-offs and valuable design guidelines towards blockchain-backed mobile data access for 5G and Beyond mobile data networks.

Rowena Gan, Gerry Tsoukalas, Serguei Netessine

No abstract is available for this record.

Mayank Aggarwal, Vishal Goar, Nagendra Singh Yadav

No abstract is available for this record.

Juan Ignacio Ibañez, Chris N. Bayer, Paolo Tasca, Jiahua Xu

Triple-entry accounting (TEA) is one of the novelest notions in the blockchain world. However, the lack of a consistent and comprehensive set of categories to give account of it impedes a proper apprehension of the concept, leading to contradictions and to overlooking its specificity. In order to clearly delineate the confines of TEA, we create a typology to distinguish between essential elements such as accounting and bookkeeping, as well as between decentralized systems, distributed ledgers and distributed journals.

Christopher G. Reddick

No abstract is available for this record.

Tommi Elo, Sampsa Ruutu, Ektor Arzoglou, Yki Kortesniemi · 7 authors

Despite the rapid spread of Internet of Things (IoT) systems, the lack of interoperability between the systems is significantly hindering their business and societal potential. Moreover, a major challenge for wider interoperability is that the IoT systems can be owned by multiple independent entities, whose collaboration will need to be organised to ensure their interoperability. One approach for achieving this is to establish federations supported by Distributed Ledger Technologies (DLTs), as this enables interoperability between entities and collaboration between business platforms, thereby overcoming many technical and administrative difficulties. DLTs can provide the required transparency and immutability for management of the federations, thus increasing trust and reducing the risk of misbehaviour that could destabilise the federation. This paper presents two system dynamics simulation models, which demonstrate that the success of a federation (with or without DLT support) is inversely related to the short-term selfishness of its members, and we then proceed to show that DLTs can improve the feedback received by the federation members on their actions by promoting a common consensus, which in turn can make the federation more resilient.

Ioannis Filippos Kanellopoulos, Dominik Gutt, Ting Li

No abstract is available for this record.

Eleu Wong Ellinger, Tobias Mini, Robert Wayne Gregory, Thomas Widjaja

An increasing number of platform organizations are run by agentic algorithms. While much is known about algorithmic management on centralized platform organizations such as Uber, where human agency is limited through data-driven surveillance and control, decentralized organizing has begun to emerge in agentic IS platforms, characterized by conjoined human and algorithmic agency. We examine this shift toward decentralized organizing by analyzing multiple cases of decentralized autonomous organizations (DAOs) that leverage blockchain technology and seek to expand, not limit, collective human action while being run by agentic algorithms. The phenomenon of DAOs gives rise to a puzzle: How is collective action facilitated in agentic IS platforms when they are increasingly run by algorithms? Our findings show that agentic algorithms have the ability to facilitate collective action that is aligned around a common human purpose dynamically negotiated through adaptation of the set of algorithms running the organization. We explain how collective action is enacted in DAOs, as an example of agentic IS platforms, presenting a grounded model developed inductively based on our multiple-case study. Our study complements and extends the work of Baird and Maruping (2021) by expanding the focus of analysis of agentic IS artifacts to agentic IS platforms and considering facilitation as well as delegation. Our detailed findings about decentralized algorithmic management and decentralized management of algorithms in DAOs extend the literature on platform organizing, which thus far has paid only limited attention to the unique mechanisms at play in the context of conjoined agency.

Tobias Mini, Eleunthia Wong Ellinger, Robert Wayne Gregory, Thomas Widjaja

A decentralized autonomous organization (DAO) is a distinct form of platform meta-organization that heavily relies on smart contracts running on blockchains to govern a distributed network of autonomous actors, thereby continuing the shift toward governance via IT. Motivated by the fact that this shift toward governance via IT in DAOs challenges established assumptions in the literature on IT governance, we explore how DAOs are governed via IT. For this purpose, we applied techniques of grounded theory to build inductive theory by analyzing five cases of DAOs (Aragon, Flare Networks, KyberDAO, MakerDAO, and MolochDAO) based on white papers, blog entries, and newspaper articles. Our findings implicate that DAOs governed via IT synthesize autonomy and alignment through the mechanism of “establishing algorithmic organization.” At the same time, DAOs rely on a more pluralistic and decentralized form of algorithmic management through the mechanism of “taming algorithmic power.”

Kanis Saengchote

Permissionless blockchains offer an information environment where users can interact privately without fear of censorship. Financial services can be programmatically coded via smart contracts to automate transactions without the need for human intervention or knowing user identity. This new paradigm is known as decentralized finance (DeFi). We investigate Compound (a leading DeFi lending protocol) to show how it works in this novel information environment, who its users are, and what factors determine their participation. On-chain transaction data shows that loan durations are short (31 days on average), and many users borrow to support leveraged investment strategies (yield farming). We show that systemic risk in DeFi arises from concentration and interconnection, and how traditional risk management practices can be challenging for DeFi.

Frank Kottler, Konstantin Graf

No abstract is available for this record.

Benedikt C. Eikmanns, Pascal Mehrwald, Isabell M. Welpe, Philipp Sandner

Similar to mobile operating systems, public blockchain infrastructures, such as Ethereum, represent a platform for the development of software applications. Since 2020, we observe the emergence of a rapidly evolving ecosystem of blockchain-based applications called Decentralized Finance (DeFi), which aspires to challenge traditional finance and associated business models. To explore the economic structures that constitute DeFi, we follow an interdisciplinary approach, supplementing information systems (IS) research with strategic management literature. We apply the theoretical lens of strategic groups to identify platform-specific dimensions and conceptualize DeFi as a hierarchical structured platform economy consisting of four strategic groups, namely 1) Token Management Applications, 2) Protocol Platforms, 3) Aggregation Platforms, and 4) Decentralized Financial Services Solutions. Further, we give a market overview of DeFi applications and discover archetypal attributes of the respective groups. Lastly, we present an integrated framework for the analysis of software-based platform ecosystems and derive areas for future research.

Massimo Bartoletti, James Hsin-yu Chiang, Alberto Lluch Lafuente

No abstract is available for this record.

Eva Meyer, Isabell M. Welpe, Philipp Sandner

No abstract is available for this record.

Vimal Dwivedi, Alex Norta, Alexander J. Wulf, Benjamin Leiding · 6 authors

Blockchain- and smart-contract technology enhance the effectiveness and automation of business processes. The rising interest in the development of decentralized autonomous organizations (DAO) shows that blockchain technology has the potential to reform business and society. A DAO is an organization wherein business rules are encoded in smart-contract programs that are executed when specified rules are met. The contractual- and business semantics are sine qua non for drafting a legally-binding smart contract in DAO collaborations. Several smart-contract languages (SCLs) exist, such as SPESC, or Symboleo to specify a legally-binding contract. However, their primary focus is on designing and developing smart contracts with the cooperation of IT- and non-IT users. Therefore, this paper fills a gap in the state of the art by specifying a smart-legal-contract markup language (SLCML) for legal- and business constructs to draft a legally-binding DAO. To achieve the paper objective, we first present a formal SCL ontology to describe the legal- and business semantics of a DAO. Secondly, we translate the SCL ontology into SLCML, for which we present the XML schema definition. We demonstrate and evaluate our SLCML language through the specification of a real life-inspired Sale-of-Goods contract. Finally, the SLCML use-case code is translated into Solidity to demonstrate its feasibility for blockchain platform implementations.

Andrea Barbon, Angelo Ranaldo

We analyze the market quality of centralized crypto exchanges (CEXs) and decentralized blockchain-based venues (DEXs) using a unique and comprehensive dataset. Focusing on two fundamental aspects, transaction costs and deviations from the no-arbitrage condition, we estimate the causal effect of ``gas fees'' on DEX market quality. We show that these fixed costs impose a significant burden on relatively small trades and cause persistent arbitrage deviations. Conversely, DEXs offer more competitive transaction costs for larger trades, offering a more favorable environment for institutional investors. Furthermore, we provide causal evidence that innovations aimed at enhancing the flexibility of liquidity provision in DEX markets lead to sizeable improvements in market quality.

Nazir Ullah, Waleed Mugahed Al-Rahmi, Ali Alkhalifah

It is expected that blockchain technology will bring a disruptive paradigm shift in the manner in which transactions are conducted in the manufacturing and service enterprises. By eliminating the drawbacks of trust-related issues in a business chain, the distributed database of blockchain can bring transparency with pseudonymity and irreversibility of records. In this paper, we advance the limited literature on DLT and its adoption in the manufacturing and service enterprises. The proposed model is based on the integration of three traditional adoption theories namely Technology Acceptance Model (TAM), Technology Readiness Index (TRI) and Theory of Planned Behavior (TPB). Based on a survey of 211 experts of Pakistan, the proposed model was tested using structural equation modelling. The study result confirms that Theory of Planned Behavior and TAM play a key role in the disruptive technology implementation. It is one of the early studies on blockchain technology adoption in the manufacturing and service enterprises and the study results indicate that more manufacturing and service industries are transforming to intelligent operations. Smart manufacturing system through blockchain applications has become the focus of attention of businesses.

Sandi Rahmadika, Muhammad Firdaus, Seolah Jang, Kyung-Hyune Rhee

No abstract is available for this record.