Mark C. Ballandies - PhD candidate in DLT and IoT @ballandiesMCbmark@ethz.ch

Designing Cryptoeconomic Systems

Blockchain

Blockchain

Currencies

Distributed Ledgers

Bitcoin

Other (DAG, Hashrgaph)

Other(Smart Contracts)

Other(Ether, Ripple, Litecoin)

Other (DAG, Hashrgaph)

Other(Smart Contracts)

Other(Ether, Ripple, Litecoin)

M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Distributed Ledger(e.g. Blockchain)

Distributed Ledger

Consensus Network

Distributed Ledger

Consensus NetworkActors

Transaction

Distributed Ledger

Consensus NetworkActors

Transaction =

Smart Contract

Distributed Ledger

Consensus NetworkActors

("Blockchain 2.0")Computer

This is the trust part

Distributed Ledger

Design system so that it is trusted

Cryptoeconomics: Take 2

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Token Unit

Conceptual Architecture1

4 ComponentsAc

tion

Dis

tr.

Ledg

erCo

nsen

sus

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Toke

n Token Unit

Claim

Conceptual Architecture1

Components are connectedAc

tion

Dis

tr.

Ledg

erCo

nsen

sus

Toke

n

Action

Transac.

Token Unit

Claim

Transac.

Actor

Writer

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Real

W

orld

Dig

ital

Wor

ld

Claim

Conceptual Architecture1

Underlyings give value to tokenAc

tion

Dis

tr.

Ledg

erCo

nsen

sus

Toke

n

Action

Transac.

Token Unit

Claim

Transac.

Actor

Writer

Underlying

On-chain

Off-chain

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Real

W

orld

Dig

ital

Wor

ld

Claim

Conceptual Architecture1

Ethereum ExampleAc

tion

Dis

tr.

Ledg

erCo

nsen

sus

Toke

n

Action

Token Unit

Claim

Transac.

Actor

Writer

Underlying

On-chain

Off-chain

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Transac.Transac.

Ethereum

Real

W

orld

Dig

ital

Wor

ld

Claim

Conceptual Architecture1

What if we incentivize actors?Ac

tion

Dis

tr.

Ledg

erCo

nsen

sus

Toke

n

Action

Transac.

Token Unit

Claim

Transac.

Actor

Writer

Underlying

On-chain

Off-chain

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Real

W

orld

Dig

ital

Wor

ld

Claim

Conceptual Architecture1

What if we incentivize actors?Ac

tion

Dis

tr.

Ledg

erCo

nsen

sus

Toke

n

Action

Transac.

Token Unit

Claim

Transac.

Actor

Writer

Underlying

On-chain

Off-chain

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Real

W

orld

Dig

ital

Wor

ldRe

al

Wor

ldD

igit

al W

orld

Toke

n

Cryptoeconomics: Take 2Token Design

Token Unit

Cryptoeconomics: Take 2Token Design

Properties

Mode of creation

Underlying

CappedSupply Uncap.yesTransferability No

MoneyType Data Reput.

ActionCreation NoneAllPre-mined Partial None

InfoSharing Token

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Design Decisions1:

Cryptoeconomics: Take 2Token Design

Properties

Mode of creation

Underlying

CappedSupply Uncap.yesTransferability No

MoneyType Data Reput.

ActionCreation NoneAllPre-mined Partial None

InfoSharing Token

Quality Token

Payment Token

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Design Decisions1:

Cryptoeconomics: Take 3Multi-Token Interaction

Designing Cryptoeconomic Systems

Taxonomy

Designing Cryptoeconomic Systems

Problem: Complexity of configuration space

Taxonomy

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Design Choices in Cryptoeconomic Systems Reduce Complexity

Design Choices in Cryptoeconomic Systems How?

?

Design Choices in Cryptoeconomic SystemsHow?

Taxonomy System Identification

Design Choices in Cryptoeconomic Systems How?

Taxonomy System Identification Classification

Design Choices in Cryptoeconomic Systems How?

Taxonomy System Identification Classification

Blockchain CommunityFeedback

Design Choices in Cryptoeconomic SystemsTaxonomy System Identification Classification

Blockchain CommunityFeedback

Apply statistical methods

Design Choices in Cryptoeconomic SystemsParticipation, Layering, Staking Capability, Cryptoec. Compl.

Aragon

Bitcoin

Ripple

Factom

IOTA

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

EOS

SingularityNET

1) M. C. Ballandies, M. M. Dapp and E. Pournaras, “Decrypting Distributed Ledger Design - Taxonomy, Classification and Blockchain Community Evaluation”. Under Submission.

Design Choices in Cryptoeconomic Systems

Thank you for your attention! Any questions?

Mark C. Ballandies - FuturICT 2.0 Forum @ballandiesMCbmark@ethz.ch