Blockchain Papers

Kwan Yiu Cheng

This article critically evaluates the regulatory landscape surrounding decentralised autonomous organisations (DAOs) in the context of Web3. Referring to the concepts of ‘race to the bottom', ‘race to the top' and the triviality hypothesis, it analyses the regulatory competition faced by DAOs and the core issues of this purported regulatory race in jurisdictions such as Wyoming and the Marshall Islands, including KYC/AML compliance, profit status and taxation and managerial standards. The article argues that while certain jurisdictions offer minimal regulatory requirements to attract DAOs, this approach poses risks to long-term sustainability, accountability and transparency of DAOs. It suggests specific directions for a ‘race to the top’ which entail comprehensive regulatory structures that balance innovation with essential safeguards. This article concludes with a critical reflection on the reality of no obvious substantial regulatory interest in DAOs and evaluates the implications of this regulatory inertia for the future of decentralised governance organisational structures.

Craig S Wright

This online appendix accompanies the main paper of the same title. It contains thefull proofs of the propositions stated in the main paper, the multi-regime Jacobian andbifurcation analysis, the notation table, and the code-and-data documentation for theempirical execution. Section and equation references that appear in this document referto the main paper unless explicitly prefixed by OA-.

Jiaochen Liang

• DeFi stablecoin yields track FFR/SOFR, but with a distinct T+3 structural lag. • A settlement-friction framework links fiat rails to the T+3 transmission lag. • The lag is universal for both compliant USDC and offshore, unregulated USDT. • Basis regressions reveal a predictable settlement wedge after policy moves. • Robust tests rule out protocol outliers, macro trends, and weekend artifacts. Decentralized Finance (DeFi) stablecoin markets increasingly function as a shadow overnight dollar system, yet the speed at which U.S. monetary policy transmits to on-chain yields remains unclear. Focusing on the recent “High-for-Long” regime (2023–2025), I study this pass-through using daily Aave V3 deposit rates for USDC and USDT. Guided by a simple conceptual framework of settlement frictions and arbitrage constraints, I estimate an ordered VAR that controls for equity- and crypto-market cycles. The results show that DeFi yields are tightly anchored to the Federal Funds Rate (and, in robustness, SOFR), challenging the “crypto-decoupling” narrative. However, transmission exhibits a distinct T+3 structural latency, universal across both compliant USDC and unregulated USDT, indicating an infrastructural, systemic friction rather than issuer-specific constraints. Robustness tests, alternative-explanations analysis, and quantity-based mechanism checks rule out protocol outliers, broader macro trends, and weekend artifacts, supporting an interpretation based on delayed settlement and execution across fiat rails. Complementary basis regressions provide a direct pricing implication: the on/off-chain spread exhibits a significant, predictable wedge during the settlement window that dissipates thereafter. The findings imply that despite algorithmic immediacy, DeFi remains constrained by fiat infrastructure, and that improving on-chain capital efficiency may require modernizing payment rails alongside issuer-focused regulation.

Sam Warner-Baker

No abstract is available for this record.

United Nations

No abstract is available for this record.

Konstantinos Stylianou

Abstract Chapter 1 introduces the decentralized economy as an umbrella term that encompasses economic activities that rely on blockchain and distributed ledgers, and can be as diverse as virtual assets, fintech, metaverse, decentralized finance, and central bank digital currencies. It explains why antitrust and competition law apply in such markets, and it presents the special features of the decentralized economy for antitrust purposes: (a) the decentralized nature of DLT products, services, and markets; (b) the prevalence of social production; (c) the role of governance; and (d) the role of tokenomics.

Or Brook, Katalin Cseres

The paper analyses how the substantive and procedural aspects of priority setting could implement considerations of gender equality and guarantee women’s equal market participation. Despite the EU’s robust constitutional framework and its horizontal clauses, gender equality remains an invisible issue in EU competition law. Notwithstanding the potential of priority setting rules and practices as a tool to combat inequality, currently they do not explicitly implement considerations of gender equality in the EU. Gender-sensitive indicators could be embedded across the priority setting rules and practice cycle. Four aspects of priority setting are particularly suitable for the consideration of gender equality: agenda setting, the substantive criteria guiding prioritization, conducting ex-post impact assessment of priority setting decisions, and the procedure in which prioritization decisions are being taken. The paper proposes to draft a new Recommendation on priority setting within the framework of the European Competition Network (ECN), nudging competition authorities to base their priority setting rules and practices on criteria based on sustainable, inclusive growth with a strong focus on gender equality. Women make major contributions to the economy, and their economic participation and unrestrained access to markets contribute vastly to inclusive growth and sustainable development.1 However, modern economies are characterized by gender divisions of labour, gender inequalities in income and wealth, gender hierarchies in industrial enterprises, gender differences in rights of ownership, and conditions of employment.2 While women represent remarkable spending power and economic influence, controlling the dominant share of global consumer expenditure, they are overrepresented among economically vulnerable groups of population with little to no economic independence.3 Women are known to have less income, wealth, and capital on average than men.4 Moreover, women are not only economically more vulnerable than men, but also have unequal access and unequal opportunities to participate in the economy. This is due to the fact that gender and gender relations, in interaction with other structures of social hierarchy, such as class, ethnicity, race, and age, shape economic relationships, preferences, choices, and decisions by businesses and consumers.5 Accordingly, gender differences influence the allocation of resources in the economy, and while the specific nature of gender relations varies among societies, the general pattern is that women have less economic autonomy, fewer resources at their disposal, and limited influence over decision-making processes.6 Women’s lack of equal participation in the economy and gender inequalities in markets have many causes including discriminatory laws, policies, and social norms coupled with shifts in the global economy and demographics, technological advances, and protracted crises.7 Part of this assemblage of barriers are the laws, policies, norms, and institutions that structure markets, which operate with a gender divide mirroring the broader organization of society along gender lines.8 Competition law is a fundamental area of the law to safeguard open and competitive markets, and to ensure that competition functions as an effective accountability mechanism against arbitrary use of private economic power at national and supranational (EU) levels.9 While debates on the optimal welfare standard guiding competition law enforcement have been long ongoing, and a large number of competition authorities adopt a consumer welfare standard globally, competition rules are generally aimed at protecting citizens from the negative impact of the undue acquisition and exercise of market power, whether private or public.10 Through preventing anticompetitive practices resulting from restrictive agreements between firms, abuses of dominant position, mergers which lead to excessive market power, and state aid that provides economic advantages to selected firms, EU competition law influences who has access and under what conditions to goods and services, and who can participate in markets. This raises the question of whether and how competition law and policy can address gender inequalities in markets and facilitate a more equal economy for women. Which tools and mechanisms EU competition law has to address the barriers to women’s access and participation in markets as consumers of goods and services, or as entrepreneurs? More concretely, this paper focuses on the question of how competition authorities in the EU can implement a gender lens in their priority setting rules and practices. Priority setting is the way competition authorities select which cases they pursue and which they disregard.11 Setting priorities entails administrative discretion on the side of the competition authorities and provides them with the freedom to choose their course of action and to make choices that best fulfil the public interest that the law protects. At the same time, competition authorities’ priority setting has vast socioeconomic consequences for economies and citizens’ welfare, and impacts wealth distribution across various groups of society, including women. The paper analyses how the substantive and procedural aspects of priority setting could implement considerations of gender equality, protect women as vulnerable citizens, and facilitate their equal market participation. It investigates this question against the EU’s legal and constitutional order and its underlying integration mechanisms that support the integration of gender equality as a constitutionally embedded fundamental right under EU law. By relying on the authors’ empirical research on priority setting rules and practices in the EU and its Member States, and the UK12 as well as the theoretical framework they developed,13 the paper offers a theoretical and a practical framework for embedding gender within competition law enforcement. In the European Union’s legal order, gender equality and competition law are both constitutional values.14 First, undistorted competition is a fundamental constitutional value in the EU legal order.15 EU competition rules are to control economic power, safeguard undertakings’ freedom of economic activity and consumers’ choice, and guarantee equal opportunities for all EU citizens to participate in the internal market. When competition is effective in markets, citizens benefit from lower prices, better products and services, and innovation. While the central concern of EU competition law is to target firm behaviour that can harm the competitive process and ultimately the economic interests of consumers,16 is also a central of the integration and as a fundamental of the EU’s internal equality is also a value of the on which the is and under is to the Member and a fundamental right in the of equality to a state in which access to rights or opportunities is not by Accordingly, can be as and women equal access and use of equal participation in and and from The of gender equality the of equal to substantive equality is to opportunities they are equality in the EU as a tool of economic and by the of the However, over the a fundamental value and of EU by the of horizontal clauses, the European of and the of the the EU various aspects of gender equality, and the a of a gender in all EU policies, while also specific to or gender the EU is as a global in gender equality, robust equal and and the gender policy and to address Competition law is not action as gender equality its at controlling excessive economic power to the for the and of competition has been the of consumer welfare the of economic in the of this standard is that not the welfare of all groups It to consumers within the market under and their economic while specific and of By on the of consumer welfare, competition law and policy do not the of such as age, race, and social income, or the potential of anticompetitive practices or the competition law that vulnerable consumers and citizens are by negative market consumers than known as the and are at a of negative impact on their the consumer welfare standard has due to its focus on and while to of broader social such as social and economic the rights of or the distribution of economic power within of that competition can and contribute to more equal distribution of wealth and that competition on other than such as or products and services, can contribute to and to this competition law the competitive process and economic power that the of a Despite on and little has been to gender inequalities and their with market mechanisms and excessive market While gender equality has been as a of economic growth and social and women’s economic and are as for and sustainable has been little consideration of how economic law and could address economic and implement gender EU competition and have not the question of how the enforcement of EU competition norms, institutions and decision-making impact women. This is as EU competition law is embedded in a constitutional gender equality has been a value of the EU legal order the of equal for of the of the the EU has not only a of equal and but has also a framework its for gender all of its policies, gender By use of the by social to and social from the of women’s this paper an based on the in EU competition law. The is a that to whether and enforcement tools women’s and the gender of rules and practices that or It the gender of a legal or social have women been of for whether the competition rules with their of consumer welfare standard of women’s in the of preferences, choices, and they markets and market power and and on an exercise is in its the and of women’s of social and power Women’s social are by of at the of race, social position, and Accordingly, can contribute to the that in with other an in markets and market The of the competitive process is a value of the EU’s legal and economic order, and as such an of of the on the European which among the EU of equality, of and for When the they to the EU’s economic and legal order, which as a explicitly the of undistorted by the competition law a in EU Member States, due to market the process of EU and strong supranational enforcement mechanisms of the European Moreover, the EU is the enforcement of the EU competition rules on anticompetitive agreements and of with the Member Competition authorities the based on their national procedural and within their and constitutional In this the of administrative and setting for the effective enforcement of the EU competition a fundamental of the EU legal order, competition law and by all Member States, and the of competitive markets is a value for all Member is also a of the EU legal order, as by equality between the Member and on equal between women and is also an of the EU as in that the EU is on of and that equality between women and equality is also a fundamental which is in of the of the EU equality rules an economic to of competition between within the the EU’s to equality law has and the of gender equality and the the EU’s gender equality have a policy from a preventing competitive within the for with to the of equal and to to the of and to a legal and framework with of the of the of in the EU constitutionally the to gender equality gender all policy and by gender equality and guiding legal of the EU. the of substantive equality the new various of and including an By a new on the social policy of the European integration the to the constitutional framework of including competition law and gender equality, a framework the economic and social of the legal By a competitive social market as an of the the on European the that social and economic interests be Accordingly, to a market economy with social by including both economic and social under the of market The of the horizontal also a of such have an to the EU’s to ensure between as not to the of policy and which be in all of EU By social and such as the of gender equality, they a constitutional to all of EU law and While all of the way integration has to remains the horizontal clauses, explicitly that the EU to gender inequalities and gender equality. Accordingly, the EU has to inequalities and gender equality all its and in its of Despite this robust constitutional and while the has that the of the be as and gender equality remains an invisible issue in the area of competition law. in their and on the of EU competition and no cases to gender equality in the practice of the or the a and in EU the horizontal have been as tools by the but their has been more in policy than in the of the Accordingly, their has been to a to the of and of equality within the EU legal The EU’s by that the gender by including a gender in all of policy in all EU policy internal and equality and competition law could be as of social and economic This also with the economic nature of the European integration and the constitutional between economic and social at EU However, social has in the EU’s constitutional framework and a inclusive internal market economic and social are at the EU is not a new equality considerations with the of a competitive market. of and wealth for many a central in the competitive markets in competition that that by economic power and equality of competition to economic The of equality of also central to the of competition which the and enforcement of EU competition While the in EU competition law from the a economic the of equality of competition law excessive state with the on the between the of competition law and has in the The of and of economic power in the of a large are as a of economic and social market power has been as to of Accordingly, both the constitutional framework and the of competition law in that EU competition law with the of competitive markets economic power is and economic opportunities are the EU’s constitutional framework is based on a competitive social market as well as the constitutional mechanisms in the horizontal clauses, both an to the of gender equality and competition law. This with the of gender equality as substantive equality in of women’s consumers and equal access to markets, and services, and their equal opportunities to participate in their of a The to the question of which EU competition law can in gender and how to and the integration of gender equality in competition law. In the framework of competition law and gender can a at various of the and enforcement. can by embedding the gender lens in the substantive of the competition law that the of the consumer and its with market power has been as a of but has not been what women’s preferences, choices, and consumer behaviour fulfil in the and market power and competitive in competition power and gender for that and access to services, or Accordingly, that for women can women gender equality and of equality in the of the competition law not First, raises value in and legal the of the power to of wealth in society to competition a that is to Competition as not have the to make value While they are who have the to they lack the to economic and the of the substantive competition law for between economic and This in legal the of a or the to be as competition law enforcement this to the that competition law and policy are not the tools to or other of the nature of the competition rules in the the substantive of the competition rules the of interests in to with legal as to the of that an from the competition in the many of can be by embedding gender equality considerations in the competition authorities’ as to the substantive competition law While competition authorities’ enforcement against anticompetitive practices can vast for society, competition authorities’ resources are limited and can target only a limited number of the of which potential they pursue and which they is of fundamental for all Setting priorities influences the of and impacts wealth distribution across various groups of competition authorities’ priority setting has vast socioeconomic consequences for economies and citizens’ welfare, including women. Accordingly, the power to the enforcement priorities provides an to gender within competition the substantive competition law Competition authorities for focus on markets or practices that women. priority setting provides for and public participation priority setting are law such as or policy law tools the competition authorities to the nature of social debates over and norms and which not be to them the substantive of the law. Competition authorities can interest groups and the general public on their priority setting and them to Despite the potential of priority setting rules and practices as a tool to combat inequality, currently competition authorities do not explicitly implement considerations of gender equality in the EU. a the allocation of enforcement and the and they are not among the of society and not who them markets have been to the of a consumer to their social position, economic or vulnerable citizens, for can be by anticompetitive practices in markets such as and Competition authorities do not or the impact of the on from demographics, social race, and Moreover, they limited for the of such vulnerable groups of society in their a groups are at a of anticompetitive priority setting the freedom and the power to choose which cases to pursue and which to and resources to the such power authorities the to focus on of economic and can be by the the or the competition as can contribute to enforcement Despite the of prioritization choices, research that is a large of priority setting and practices across national legal in the the question of what of competition law the European and the Member national competition authorities and how such decisions have not been in The and procedure for setting enforcement priorities have not been by the EU of the an on the Member to their competition authorities to their enforcement and to that they do not to be an enforcement However, this legal has not been by or EU law to Member or in setting the enforcement Moreover, competition authorities have and invisible priority setting practices. are by no or rules on how and they their enforcement and are not to or their prioritization In many competition authorities their enforcement priorities in a of their enforcement are to to by consumers or to and than conducting their prioritization are to focus the enforcement on a of anticompetitive behaviour in the interests of than of The EU’s of for that while the European priority to cases which have the potential impact on the internal market and on criteria to be in to ensure the of cases with the to competition or consumer welfare in the internal market and across all economic By relying on the authors’ this analyses how priority setting could implement considerations of gender equality and address practices that gender inequalities to First, gender equality can be in priority setting rules and practices by on the of markets, on anticompetitive practices in markets that to gender for spending of consumers’ such as services, and priority could be to markets and the of In the women are overrepresented in such as and priority setting could also focus on access to markets, anticompetitive behaviour that market access of and by vulnerable groups such as businesses that in access to and on anticompetitive practices that market access by women access to and Gender-sensitive indicators could be embedded across the priority setting rules and practice cycle. In empirical various aspects of the priority setting to their and in the and Four aspects of priority setting are particularly suitable for the consideration of gender equality: agenda setting, the substantive criteria guiding prioritization, conducting ex-post impact assessment of priority setting decisions, and the procedure in which prioritization decisions are being taken. First, gender equality considerations could a competition that a of enforcement that or practices are a an agenda than only to or of their impact on markets and It in whether to open an or to a and what enforcement tools to use in agenda could focus on and practices women a of their they are in the economy, they are for in social and with such as and In in of and social and of in are The substantive criteria for priority setting to or internal criteria guiding competition authorities’ decisions on whether to pursue or a agenda setting, this not to a specific or but to Setting substantive criteria structures the exercise of the competition authorities’ use of focuses enforcement on and the It both enforcement in cases of or and practices only a limited impact on consumers and It also functions as an accountability substantive criteria accountability and and of the of prioritization to broader While EU law not substantive criteria for Member States, such of the are by substantive by the national or as by only internal substantive by as internal control and by both internal and substantive and are not by or internal criteria at research has that or the competition authorities have competition law prioritization such have on practical of the for legal the of an the resources of the competition the legal the competition is well to an the potential of the and on economic growth indicators or of the the impact of the on the of the economy or the or on consumer In that prioritization decisions of the European and the of the EU Member are by economic growth on consumer welfare as the of their substantive prioritization Setting competition law enforcement priorities based on the consumer welfare standard or other growth indicators not who the of the are and the impact the competition law enforcement have on their priorities by the consumer welfare standard do not between the products or to an for between competitive harm in products markets and an competition authorities could their priorities with to broader growth the have that such as do not a of the conditions that Accordingly, is a for for not and economic growth but also in the of and such not only at the of the economic but also at the and conditions of of and have been from economic growth to inclusive and sustainable a and and to wealth across society and opportunities for In of gender and women’s have been The and the for are both and in the to The and In the the is a tool to the of gender equality. by the European for its in has and by a of gender equality, to the EU’s policy It both and and more effective to opportunities for The have been and in over the in substantive prioritization criteria that their competition law enforcement more with new of inclusive and sustainable The and competition authorities have both the economic that influence and ultimately better for all of The and a more inclusive and sustainable growth to of This is from the on broader and the of competition the with The prioritization the to the which explicitly that harm can be markets do not with in vulnerable in at of and the to markets well for vulnerable the for and its prioritization The of the of the make markets well for and and in the the competition is an economic process that the of It is a to a economy and in a and to contribute to in a that and businesses from the of markets. the assessment of is not limited to or in markets. The social interest in the of the including not only market markets, optimal of legal or and consumer but also public interests such as economic of and The also an enforcement of the large impact its have on a such as and in vulnerable or and impact prioritization choices, for by who can participate as in the participation and various functions in administrative that the of and administrative decision-making in modern not only and administrative authorities in the of markets, but their participation an of and accountability that the of the and the participation of is an mechanism the administrative use of and functions as a to are the to the of the competition or that could ultimately lead to the of the However, such a is of participation rights and no on the competition authorities to address them by a enforcement and is for and for technological in but is only of the considerations for modern public and a between procedural and be This could for between of participation and by to of who are in the public Women as in the public interest of gender equality, could be procedure to the could be which society to a anticompetitive which the competition to the of the by a in a that administrative are not only in the and equality of This women’s to participate in decision-making by being and access to by the participation rules in legal It the of the of law that by the of administrative decision-making be effective participation and of their legal competition authorities can gender equality considerations within impact ex-post assessment of prioritization assessment of competition law is limited in general and to prioritization are no for the of a competition in general and the allocation of enforcement priorities in the lack of such and the in and the impact of the enforcement the limited ex-post of competition law enforcement to focus on the number of in a or on growth indicators such as consumers’ the in resulting from the competition policy enforcement in the market by the of the Competition authorities little on the impact of their of cases and enforcement is little on the impact of the enforcement on the of or the of products or This by the EU of for the European for on than on and the of its enforcement for gender equality considerations within impact prioritization in with the EU policy on gender impact the European a of in its to gender the policy from policy to and While the not gender impact as a has the consideration of gender within its general impact assessment equality is not a of social but also a fundamental of sustainable and inclusive By equal opportunities in markets, can facilitate women’s potential as to and a competitive markets are to and in a including the interests and of women. While the of EU competition as a area of the EU legal and economic order, has been to protect competitive markets and goods and for a broader constitutional value that a social order well and of specific The and the constitutional of EU competition law are with the of equal which is a of gender equality as a constitutional and fundamental right in EU law. Despite this strong constitutional of the between competition law and gender equality, and mechanisms of gender the horizontal clauses, their invisible both in the EU and in national competition law This paper offers a but enforcement tool to gender equality in the enforcement of competition law. It how gender equality considerations could be in the priority setting rules and practices of competition authorities to how such could be in the substantive of the competition law While being of the administrative and constitutional across the EU Member States, but also the central and the in EU competition law policy across the the this paper is a of the Recommendation on the power to priorities in the framework of the the to priorities the could within the framework of the a that on the way prioritization criteria are the EU has its growth which is based on the of and inclusive growth and competitive the the on the of the its legal and economic order for a of the consumer and for the based on sustainable, inclusive growth and also social of The have no of interest to

Kose John, Thomas J Rivera, Fahad Saleh

Abstract We develop an economic model to compare equilibrium security of Proof-of-Work (PoW) versus Proof-of-Stake (PoS) blockchains. We derive general conditions to determine when PoW blockchains are more secure than otherwise equivalent PoS blockchains and vice versa. Applying real-world parameter values to these conditions, we demonstrate that PoS blockchains are more secure than otherwise equivalent PoW blockchains. Furthermore, we demonstrate that PoS’s security advantage over PoW is particularly salient for high-scale blockchains.

Jingchen Liu, Yao Cui

No abstract is available for this record.

Fei Wu, Thomas Thiery, Stefanos Leonardos, Carmine Ventre

Block production on the Ethereum blockchain has adopted an auction-based mechanism known as Proposer--Builder Separation (PBS), where validators outsource block creation to builders competing in MEV--Boost auctions for Maximal Extractable Value (MEV) rewards. We employ empirical game-theoretic analysis based on simulations to examine how advantages in latency and MEV access shape builder strategic bidding and auction outcomes. We find that a small set of dominant builders leverage these advantages, consolidating power, reducing auction efficiency, and heightening centralization. Our results underscore the need for fair MEV distribution and sustained efforts to promote decentralization in Ethereum's block building market.

Hanna Hałaburda, Daniel Obermeier

Digital platforms dominate our economy Without a doubt, platform business models have revolutionized almost every industry, from e-commerce (Amazon) and operating systems (iOS and Android) to transportation (Uber), film (Netflix) and hospitality (Airbnb).In 2023, four out of the five most valuable companies worldwide operated based on platform business models.Often, these platform business models have made services more accessible and significantly reduced costs for their users.Platform business models enable the platform provider, as the intermediary, to make these improvements at low costs for their users as network effects lock in users and allow the provider to collect and monetize their data.This mechanism often leads to one strong player dominating the market, allowing them to monetize their monopoly-like position.The recent upsurge in artificial intelligence (AI) has fostered fears that these platform businesses might become even more powerful.More than ever, critics are concerned that current regulations fail to mitigate these dynamics, as antitrust regulations have failed to prevent platform providers from acquiring even more market power.Regulators are often fighting an uphill battle as the platform businesses can often rely on much deeper pockets and smart lawyers who find new ways to play down their employers' real power.

Yuanyuan Liu, Bingrui Huangfu, Zheng Qiao, Zhao Xi

No abstract is available for this record.

Irina Gotskaya, K.O. Ateev

This study empirically investigates the distribution of control and diversity in decentralized autonomous organizations (DAOs) on the Ethereum blockchain. It uses a number of measures-the Nakamoto coefficient, Gini coefficient, Her-findahl-Hirschman index, Theil index, Shannon entropy, and Simpson diversity index-to assess decentralization and fairness in the distribution of control tokens. The analysis reveals a complex landscape in which some DAOs exhibit decentralization with diversity in the distribution of control, while others exhibit significant concentration of power and inequality in the distribution of power. A key observation is the coexistence of a broad distribution of control among EOA addresses with significant inequality in the ownership of control tokens. This indicates that a broad distribution of control does not always correlate with a fair distribution of management tokens. The study also highlights the possibil-ity of delegation mechanisms that may lead to a more equitable distribution of power compared to direct representa-tion. This study provides insight into the governance dynamics of DAOs by demonstrating the complex multi-level bal-ance between decentralization and centralization in a decentralized technology infrastructure.

Gilbert Fridgen, Roman Kräussl, Orestis Papageorgiou, Alessandro Tugnetti

Abstract This paper analyzes the sales of 875,389 art nonfungible tokens (NFTs) on the Ethereum blockchain to identify the key determinants influencing NFT pricing and market dynamics. We find that market liquidity and trade volume are strong predictors of NFT prices. Contrarily, social media activity negatively correlates with prices. Introducing an artist ranking system, our study reveals a “superstar effect”, with a few artists dominating sales, and herding behaviour within the NFT market.

Yuan Yuan, Xiao Liu, Shunyuan Zhang, Kannan Srinivasan

No abstract is available for this record.

Xinyu Tian, Zesen Zhuang, Luyao Zhang

The Merge changes Ethereum from Proof-of-Work (PoW) to the more secure and less energy-intensive Proof-of-Stake (PoS) mechanism. However, the existence of malicious valida tors still threatens the security of Ethereum, primarily through a discouragement attack. How can we redesign the incentive mech-anism in PoS Ethereum for a more secure blockchain? For this quest, we, for the first time, apply the cutting-edge reinforcement mechanism design method-an interdisciplinary approach at the intersection of reinforcement learning (RL) and mechanism design-to staking mechanism designs. We abstract a generalized staking mechanism as a game environment and implement an RL method for the blockchain as a mechanism designer to explore the optimal incentive design. Our reinforcement mechanism design outperforms the status quo in cultivating honest validators. Furthermore, we identify Advantage Actor-Critic (A2C) as the most efficient RL algorithm among the three alternatives, which intuitively performs better when the initial proportion of honest validator is larger. Our interdisciplinary approach of generalized abstraction could be adapted to analyze the incentive design in any PoS blockchain and beyond.

Marcin Wątorek, Paweł Szydło, Jarosław Kwapień, Stanisław Drożdż

The non-fungible token (NFT) market emerges as a recent trading innovation leveraging blockchain technology, mirroring the dynamics of the cryptocurrency market. The current study is based on the capitalization changes and transaction volumes across a large number of token collections on the Ethereum platform. In order to deepen the understanding of the market dynamics, the collection-collection dependencies are examined by using the multivariate formalism of detrended correlation coefficient and correlation matrix. It appears that correlation strength is lower here than that observed in previously studied markets. Consequently, the eigenvalue spectra of the correlation matrix more closely follow the Marchenko-Pastur distribution, still, some departures indicating the existence of correlations remain. The comparison of results obtained from the correlation matrix built from the Pearson coefficients and, independently, from the detrended cross-correlation coefficients suggests that the global correlations in the NFT market arise from higher frequency fluctuations. Corresponding minimal spanning trees (MSTs) for capitalization variability exhibit a scale-free character while, for the number of transactions, they are somewhat more decentralized.

Camilla Yen

No abstract is available for this record.

Hardy Gundlach

No abstract is available for this record.

Darren Shannon, Michael Dowling, marjan zhaf, Barry Sheehan

Non-fungible tokens (NFTs) rose to prominence as a wide-scale implementation of blockchain technology to support the emergence of crypto-asset markets. These nascent digital markets raise questions about the behaviours of investors in the digital economy and their appetite for risk. Using 28,919 auction listings, 4937 sales, and 30,197 Telegram messages, we conduct a field study on the bidding and selling behaviours of NFT investors in a Dutch auction system. We reveal risk-seeking behaviours in our sample of Dutch auction sales. We document that time pressures and value propositions significantly influence NFT investors: fast clock speeds and greater price separations induce underbidding behaviours and are associated with low value retention for sellers. These results are confirmed using a matched-pairs analysis. Our study raises further questions on the risk preferences of investors in emergent digital marketplaces. We propose value maximisation strategies for marketplace developers and participants, while drawing attention to the presence of potentially exploitable biases and heuristics amongst participants, courtesy of bidding incentivisation schemes significantly altering how investors value NFTs. • We identify the bidding and listing behaviours of NFT investors in Dutch auctions. • 28,919 listings, 4937 sales, and the sentiment of 30,197 messages are examined. • We identify risk-seeking underbidding behaviours from NFT investors. • Time pressures, value propositions, and market experience are influential factors. • Strategies are proposed for NFT developers and traders to maximise profit.

Adrian Kuenzler

This note outlines three key areas of transformation that competition law has gone through in the past few decades and considers the direction it should take from here. The idea is to juxtapose the role of ex ante regulation with ex post competition law interventions in getting to grips with novel types of harms that the digital economy has brought about and that increasingly pertain to consumers, the market, and society as a whole. There are essentially two debates around the role of competition that have influenced the manner in which the law contends with data-driven markets. One relates to the goals of competition law.1 Much legal doctrine has assumed that we need one single theory to make competition policy consistent—we may refer to this as first-generation competition law. Another relates to the means by which competition law achieves its goals.2 Here, legal doctrine has focused predominantly on entitlements and market structure—we may call it second-generation competition law. The issues underlying these debates have recently been catalysed by several high-profile empirical investigations that observed rising concentrations of corporate power3 and the associated claim that competition law should be employed to restructure markets, by breaking big technology companies up or by divesting them into separate units.4 Regardless of whether one leans towards ex ante regulation or ex post competition law interventions in dealing with problems of concentration and their harmful economic and social effects, the result of these debates is a set of shared assumptions which have produced the coding structure that has become the node between theory and practice. Analysts have internalized these assumptions, although different camps put their own normative twists on them. The problem is that competition law’s coding structure has become redundant: it no longer represents the deep-seated realities of data-driven markets. In highly concentrated marketplaces, competition law and regulation inevitably work together, depending on and colliding with one another, but neither entirely holds sway. Against this backdrop, competition theory and doctrine can no longer serve one single goal nor can they continue to rely exclusively on entitlements or market structure. And yet much legal scholarship still turns upon these debates.5 The Digital Markets Act (DMA) is perhaps the most pertinent example of this trend.6 Data-driven markets require a distinct frame for conceptualizing novel types of harms—third-generation competition law. This is especially relevant for stalwarts of ex ante regulation who steadfastly maintain that issues around product quality in digital markets are outside the purview of competition law. By insisting that competition law pursues one single goal—usually in terms of low price (and high output)—this perspective severely prejudices any potential reflection as to how the law contends with issues posed by markets with a zero price and frustrates the ability to arrive at an effective resolution of such issues. Apologists of ex post competition law interventions must also adjust their views. There are good reasons behind their belief that decentralization matters; however, they frequently insist on an increasingly antiquated notion of how competition operates, in that the only disciplining mechanism in terms of leading actors’ behaviour consists in affording consumers an ‘exit’ option, that is, an opportunity to switch between different alternative offers. The image of the perfectly competitive market, for instance, is exit-centred to the extent that sellers are unable to displease their customers because consumers will swiftly shift from one supplier to another if they are dissatisfied with the products and services they receive. And if switching turns out to be impossible or unworkable, second-best alternatives such as separations or divestitures are thought to reinstate the ability of consumers to switch, pushing concentrated power out to the ends of the Internet and defying any consolidated arrangement involving small groups of dominant undertakings, as though no alternatives prevailed. This note will briefly survey these debates, but the emphasis is on what lies ahead—what ought competition theory and doctrine to resemble in the digital economy? Without a doubt, any answer to this question is unlikely to assume the sophistication and precision that have marked previous debates; however, this is precisely the point of this note. Disputes around data-driven markets regularly turn upon the major Internet platforms’ illegal acquisition of small competitors, their character as monopolies, and their preference for their own related products through network algorithms, resulting in harm to competing producers. Moreover, there are concerns around the platforms’ size and reach, which highlight the risk of suffocating progress, intensifying inequality, and exacerbating social and political polarization.7 To address these harms, policymakers regularly maintain that competition law should be employed to break the companies up or to divest them into previously acquired entities. Proposals such as these, however, contain a complex tension: because the dominant platforms’ activities present risks in economic and non-economic terms, competition law either needs to be repurposed, to deal with a broader set of values, or is required to refrain from contending with non-economic issues altogether—issues that are better dealt with by laws designed specifically to target privacy, data security, fake news, and so forth. The problem with this view is that distrust in the sheer size of big technology platforms, and the reach of their activities, obscures the network benefits that these platforms generate and that they may augment by expansion in the future.8 The tension is in large part a consequence of the debate around the goals of competition law: whether competition law needs to be focused exclusively on consumers, competitors, or both, or whether it should also attend to the social and political harms of market power. First-generation competition law cannot adequately capture the realities of digital markets that implicate seemingly non-economic values such as privacy, diversity, or editorial integrity. It presupposes claims that are based upon price and output when in fact these claims relate mostly to (various types of) product quality.9 Bringing competition theory and doctrine up to date would require theorists to acknowledge that competition law cannot be understood as an avenue to promote one single set of values. Instead, it should be seen as a practical device to underpin consumers’ calls and to align the economic goals of leading actors with the views of their own customers. To be sure, it is perfectly reasonable to argue that competition authorities and courts should focus on one single goal because they lack the required knowledge to make rules that can govern unknown future circumstances in dynamic settings. In the digital economy, however, decisions taken by authorities and courts inevitably affect the policies adopted by dominant incumbent actors, thereby shaping the broader legal and economic landscape. For this very reason, authorities and courts with limited knowledge may adopt instead a blend of different enforcement strategies available—because they are sometimes ignorant. Although this may at first seem counterintuitive, adopting a blend of different enforcement strategies enables authorities and courts to confront incentives to rule broadly while at the same time working towards greater convergence of different pertinent values such as privacy, diversity, editorial integrity, and competition.10 First-generation competition law inexorably collides with this point. That is precisely why stalwarts of regulation and apologists of decentralization regularly pit the values of competition against those associated with special purpose regulation. The camps’ common supposition is that we need regulation or competition, and the mere issue that persists is to assess which realm a particular problem is best associated with. And while debates around the goals of competition law may have shifted our perception as to whether a particular issue belongs to regulation or competition, these debates have barely influenced the manner in which we contemplate the workings of concentrated markets. These quarrels notwithstanding, with the newly enacted DMA, ex ante regulation and ex post competition law interventions now govern together in a space that has relentlessly been negotiated and contested. Contrary to what stalwarts of regulation would suppose, the DMA does not mean that regulation will prejudice competition, that it will impinge upon the continued application of Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) to the behaviour of big technology platforms or that competition law will gradually become redundant. Nor does it mean, as apologists of decentralization would maintain, that we should no longer be required to reconsider the assumptions of first-generation competition law. The DMA creates a regulatory regime that is aimed at ensuring fairness and contestability and when it regulates it does not hold unfettered sway any more than competition law wields unencumbered control when it is engaged.11 To be sure, as an ex ante regulatory instrument governing core platform services offered by entities that qualify as ‘gatekeepers’, the DMA reigns supreme, but in effect, it creates a space of regulatory overlap in which the actual choice is not between ex ante regulation or ex post competition law interventions; rather the choice is both as well as and, and this assumes some significant degree of common ground that accompanies that interdependence.12 Digital markets arguably distort the classic distinction between production, distribution, and consumption. Decisions taken by consumers in the digital economy are increasingly made passively, through implicit or explicit product matching and personalized recommendations rather than through active search. Take artificial intelligence-based algorithms as an example. Such algorithms recommend and purchase products based on spoken, written, or inferred requests obtained from users of digital platforms or devices such as mobile phones, speakers, and smart assistants.13 These algorithms benefit consumers in that they facilitate swifter and more complex transactions, and diminish consumers’ search and transaction costs. But they also work to entrust the ability of consumers to actively search—including their capacity to pick and choose—to big technology firms themselves and place consumers’ decision-making power into the hands of producers. This creates opportunities for misaligning the preferences of consumers with the goods and services actually sold, causing harm to customers, competitors, and the market (including society) as a whole.14 To remedy such harms, competition law usually ensures that consumers have an opportunity to choose between different alternative options. This is the equivalent of the conventional idea in which efficient markets afford consumers an ability to switch between distinct providers so that they can pursue their own commercial transactions at their individual discretion. But in concentrated markets, consumers typically are no longer able (or indeed willing) to choose effectively between alternatives. This is why, in theory at least, competition law is supposed to break big technology companies up—to reinstate the ability of consumers to choose between different alternative offers. Second-generation competition law grew out of its fixation on consumer switching as the only disciplining mechanism in terms of market actors’ behaviour. Even in highly concentrated markets, most of the time, there are thought to be alternatives, particularly where competition by other actors is just one click away. If switching nonetheless ends up being impracticable or turns out to be ineffective, competition law requires structural separation, to reinstate consumers’ choices, and to lessen the adverse effects of dominant incumbent actors on competitors. The main cognates of this account are regulatory arrangements that seek to preserve consumer switching through data portability or interoperability measures.15 Such measures seek to make it easier for participants to compete and to restore the autonomy of consumers, including their ability to choose. As to the predominant role that switching plays in promoting competition, second-generation competition law has not attained a middle ground in the debate around ex ante regulation and ex post competition law interventions; instead, most policy proposals fit into two groups. One is about entitlements: regulation should afford consumers a right to switch—an ability to choose between different options, put in place by mandated interoperability or established rights to data portability, which are geared towards both animating rivalry/lowering barriers to entry, and allowing new firms to compete. The other is about market structure: policymakers are concerned that the marketplace itself does not provide consumers with adequate opportunities to switch. The solutions they present almost inevitably involve forcing big technology companies to separate from (some of) their essential services to reinstate consumers’ choices and to lessen the adverse effects of dominant incumbent actors on other players. Both approaches seek to re-establish competition, by rendering users’ data portable and competing firms’ services interoperable. Portability provides consumers with an entitlement to switch; structural separation and/or interoperability afford consumers the ability to choose between different alternative offers by dint of adjustment to market structure. As with the shared assumptions underpinning first-generation competition law, second-generation competition law is difficult to square with the realities of data-driven markets. It rests on the notion of outright regulation or sheer and an perception of how data-driven markets As concerns the and structural are not the only at not the most for consumers to In concentrated marketplaces, consumers are most to have their by some in leading actors’ decision-making as to the on which those actors or their Here, consumers’ preferences can best be put into if users and their in this a to leading actors’ product The of such typically through an avenue of it ensures that in concentrated consumers can a of market to a significant second-generation competition law has the notion that entitlements and market structure are what most for data-driven markets, law in fact that competition authorities and courts work to consumers to leading actors’ product For in the into the that the most effective to competition and consumers’ not to break the up but to require to into the users to out of the data In a the European in upon the to that competing services no than its own its search of consumer preferences into leading actors’ has also been to be adequate in to claims against the to or and are with to dominant As the fact that second-generation competition law does not account for the manner in which data-driven markets it is to that in data-driven markets, and to consumers to from to Take the in In this the understood that been and that has in a of digital companies on consumers’ from platforms to As a separation of the would only have opportunities for entities to compete in and to confront the underlying incentives that the an alternative avenue of it consumers to of terms and of forcing the platform to control of the and of data to consumers, consumers in a to control the of data Second-generation competition law has the that of consumer of its focus on entitlements and market it has not any space for consumers to some control product and sellers by to them. If we the coding structure of second-generation competition law, competition theory and doctrine would be required to what may be the of an extent of manner in which authorities and courts and effectively the policies of leading actors on of consumers, and thereby work to consumers’ views into the market when other of are or In the DMA itself a of to the behaviour of that not only to promote consumer switching but that also to this regulatory overlap and are thought to be the rule rather than the law, for its will have to put emphasis on entitlements and market structure and more on of consumer the role consumers in shaping leading actors’ policies from their rather than to the part they in them from does the DMA for competition theory and The DMA an emphasis on the regulatory but the is more In effect, the DMA that the time is to the that has arguably the of competition theory and competition law. This is an issue that legal scholarship has yet to for both and normative In terms, stalwarts of regulation and apologists of decentralization have been in a the and benefits of but they have on one single between means and Both camps have supposed that competition goals and that the most problems are best exclusively by of regulation. That turns out to be The DMA has what most theorists thought to be the part of the debate around regulation and This is because competition law also a regulatory this holds for and As concerns the competition law a significant structural role in that a of in Articles and DMA from behaviour that competition authorities and courts previously and that relate to that is best understood in terms of Here, competition law regulates in that it is in the is competition law ensures that the DMA DMA that the may a market for the purpose of whether one or more services the digital should be to the of core platform services in DMA or for the purpose of that the contestability of core platform services or that are and which are not effectively by the in its the any relevant of Articles 101 and 102 digital markets well as any other relevant market investigations DMA may some in new in with the the DMA that competition law will a role in its and new rules are and are the result of Here, the in which an issue relates either to ex ante regulation or to ex post competition law interventions ends up being than previously been the DMA (and new will continue to in part on that around of market that is, around how to a significant role in governing markets is for consumers as a Moreover, competition law assumes a role in of the new The in for made it that a extent of market concentration inexorably incentives for services to be towards the and from the preferences of consumers, the market, and society at these leading search social and may through their algorithms and the of other actors, with in terms of product production, and In to be the not only to adjust the and but it also the manner in which policymakers and theorists the underlying It this on of consumers and decision-making on the of the to the for the on in and related and and and/or adopted by in different The DMA several in which by consumers, put in place through has been to ex post competition law interventions with ex ante regulation to contestability and fairness in digital markets. and in concentrated are difficult to they need to be and from through authorities and courts on of consumers as the of the of new laws those and The DMA that taken by authorities and courts can break ground for novel policies that leading actors to consumers’ views into their when and have gradually become more taken on of consumers does not require a debate of issues on an but a in a and in are out through a mechanism of in which and reasonable is such a opportunities for by the law, are in terms, and the main actors are and that their views ex The between and their is distinct from that which authorities and courts on of consumers ex that in is based on the of a rather than on mere assumptions or And it is for consumers to a more perception of how the policies of leading actors work in especially in of the and of data-driven markets. who to with a view to a through are to have a better of the circumstances of a and they may hold of a broader of Moreover, consumer may in in to behaviour and in to new so that authorities and courts can consumer more than the in a competition law also more ends in of the on its the of regulation groups of actors with different of knowledge and from those in competition law including of of and the focus of regulation is typically on that are from the effects of based on actual the are for the most part they are on from past investigations and are up by the shared and of authorities and courts that seek to in a manner that is for incumbent actors to In this the DMA to a of good in markets, that core platform services offered by are to of the arrangement that the DMA is based upon by and large from law that has been put in competition law. It the of consumers in the of leading actors’ to incentives and to underpin consumers’ calls rather than to promote one single set of values. One that the why there are different camps is that different camps hold distinct of how markets That to the point as to why competition law calls for a need to the camps competition law is different from what either but it is also different from what either significant The DMA offers to a middle ground between the camps in to As the DMA, investigations by competition authorities and courts will a Although the DMA in to on competition law is also to the regulatory This is where competition law and the DMA are to in and to different law may not be but it will also be for shaping the new is where the digital economy and competition law will Such may the of entirely new or a towards different market And where it is that market investigations DMA will to the of new core services and of competition are the competition investigations the for new most significant that need to be understood they are taken into the regulatory law is not or by instead, competition law To be sure, there are concerns the application and of the in the DMA But for of the such from competition law and thereby its stalwarts of regulation nor apologists of decentralization are to view this arrangement as But nor will either be to the DMA represents a to debates around data-driven markets. these to the competition theory and doctrine need to be in them are a of assumptions that no longer the realities of data-driven markets. In such markets, regulation and decentralization are neither the DMA nor competition law instead, they govern for about a of this has entirely been by competition theory and It is time to them up to date with the of competition law.

J. Christopher Westland

No abstract is available for this record.

Yinhong Zhao

Delays in finance impose real costs, yet they are difficult to measure in traditional settings. Leveraging Ethereum's on-chain data and fee market, I estimate a structural queuing model that maps fee bids to time preferences and quantify delay costs in decentralized finance. The median transaction bears a 7.1 bps implicit cost, with costs highly skewed and totaling $9.88 million per day. Counterfactuals show that a flexible block gas limit as in EIP-1559 cuts the loss from delay by 32.9%, and doubling block frequency with half-size blocks cuts it by 13.6%. Combined, the two policies reduce losses by a striking 63.9%.

Thibault Schrepel

Web2 giants and Web3 projects entertain a complex relationship. They cooperate to maximize their chances of survival, yet they also compete through a combination of dynamic factors and anti-competitive strategies. The present contribution untangles Web2 and Web3’s relationship, explores their distinct value propositions, and outlines what may be one of tomorrow’s enforcement priorities for antitrust agencies.