Patrick McConnell’s Post

Lies, damned lies and crypto folk-law! Just posted a preprint of a paper, "The Folk-Law Behind Blockchain Narrative Economics" (co-authored with Megumi Hara), on SSRN: "The blockchain’s libertarian origins, rooted in cypherpunk philosophy, is undisputed, but its mainstream adoption saw many contradictions between stated objectives and observed realities, such as the proliferation of intermediaries – first crypto-exchanges and more recently, ETFs – in a space supposedly intent on disintermediation. Much of this is rooted in Satoshi Nakamoto’s White Paper for Bitcoin, which demonstrates little understanding of either property as a legal concept or how finance functions. On this poor foundation has been built a quasi-religious faith in the blockchain regardless of what mainstream law or economics has taught us over several centuries. Just as popular discourse on blockchains suffer from what Nobel laureate, Robert Schiller, calls narrative economics, some of these narratives also suffer from what we call folk-law, wild folkish extrapolations of all manner of consequences from often mundane legal pronouncements or outright twisted misrepresentations of the law. This chapter looks to unpack some of the folk-law that contributes to the narrative economics of the blockchain and in doing so, explain why, in spite of all the excitement over the blockchain and the pouring of billions of dollars into all manner of projects, more than a decade and a half of hype has mostly led to a damp squib." Incidentally, my earlier paper with Megumi Hara, "Cryptoassets and Property", which examines the proprietary status of cryptoassets from a comparative law perspective (https://lnkd.in/gupyNRqt) will soon see publication, following which we will have to temporarily take down the SSRN preprint. So if you would like to read the preprint, you should download it soon before we do so. Incidentally, the eagle-eyed among you will notice that I've rejoined HKU Law today. For a variety of family reasons, I've decided to return to Hong Kong. The past three years at NUS Faculty of Law have been great, especially the opportunity to meet and mentor (at least I hope they regard it as mentoring) a bunch of bright young scholars, but personal circumstances change and we must adapt to those changes. A move was inevitable in any event given the law school's impending return to Kent Ridge (https://lnkd.in/g8PWvA-n). I've just moved a little earlier and a little further. https://lnkd.in/geeYz3x9

Ah, it turns out that the combination of cryptography and distributed ledger technology (blockchain) is not very useful. However, the face-saving, residual storytelling continues. "This chapter looks to unpack some of the folk-law that contributes to the narrative economics of the blockchain and in doing so, explain why, in spite of all the excitement over the blockchain and the pouring of billions of dollars into all manner of projects, more than a decade and a half of hype has mostly led to a damp squib."

Tokenomics 101: A Clear Guide to Cryptocurrency Economics

Economics begat > digital economics begat > cryptoeconomics. Cryptoeconomics, the cold hard definition: “a multidisciplinary field that combines cryptography, economics, and game theory to analyze incentive mechanisms within decentralized systems.” Understanding cryptoeconomics for DeFi and Web3 companies is vital for several key reasons: 1. Incentive Alignment 🎯 Cryptoeconomics allows companies to design incentive structures that align the interests of all stakeholders (users, developers, investors, etc.) in a decentralized system. This is crucial for fostering collaboration and participation without a centralized authority. 2. Token Economics 💰 By leveraging tokens and cryptocurrencies, DeFi and Web3 companies can create new economic models and revenue streams. Tokenization enables innovative funding mechanisms, governance structures, and incentive schemes. 3. Decentralized Governance 🗳️ Cryptoeconomic principles help establish decentralized governance frameworks, where token holders have a say in decision-making processes, ensuring transparency and collective ownership. 4. Security and Trust 🛡️ The use of cryptography and game theory principles in cryptoeconomics enhances the security and trustlessness of decentralized systems, which is essential in the absence of intermediaries. 5. Network Effects 📈 Well-designed cryptoeconomic models can create powerful network effects, where the value of the system grows as more participants join, leading to increased adoption and sustainability. 6. Innovation Incentives 💡 By incentivizing desired behaviors, such as contribution to open-source projects or participation in decentralized networks, cryptoeconomics fosters innovation and growth within the DeFi and Web3 ecosystems. 7. Regulatory Compliance 📝 As regulatory frameworks for DeFi and Web3 evolve, cryptoeconomics can help companies design compliant token models and incentive structures, ensuring long-term viability. Cryptoeconomics is the foundational framework that enables DeFi and Web3 companies to create sustainable ecosystems. It is a critical component for these companies to unlock the full potential of blockchain technology and establish new paradigms in finance and beyond. If you're looking for PR experts that get it, reach out for a free consultation: https://VComms.io #Web3 #defi #DigitalPR #pr #web3pr #cryptoeconomics

As someone who loves to explore different AI platforms, I couldn't resist testing it on a post about Austrian Economics. First and foremost, I want to make it clear that I am an Austrian Economist. My dissertation on decentralized autonomous organizations (DAOs) is based on Austrian Economics, citing Mises, Rothbard, Menger, Schumpeter, Hayek, Hoppe, Rockwell, Manish, Powell, Gordon, Klein, Salerno, de Soto, and Böhm-Bawerk. My work heavily stands on the shoulders of Per Bylund and his work on Austrian Econ and the Firm. I am alumni of Mises University 2016 (Mises Institute), Walter Block wrote my PhD recommendation, and I write and teach from the Austrian perspective (specifically about Bitcoin, the cypherpunks, and cryptocurrencies). But here's my question: will interest in Austrian Economics see a cycle similar to Bitcoin's? As Bitcoin's halving cycle every four years helps to spread its adoption, could governmental failures in fiscal and monetary policy promote Austrian Economics during times of bear or busts? I'd love to hear your thoughts. #AustrianEconomics #Bitcoin #AI #DecentralizedAutonomousOrganizations #DAOs #FiscalPolicy #MonetaryPolicy #GovernmentFailures #EconomicEducation

Incentive Compatibility : In Crypto Economics🧵🛡️ Incentive compatibility is originally a concept from game theory but as a concept has seen some adaption in the context of crypto economics and in particular DeFi. In the crypto economic setting, a mechanism is defined as incentive compatible iff agents are incentivized to execute the mechanism as intended. A central question in the context of incentive compatibility is the sustainability of the mechanism implemented by a system (i.e., will the incentives arising from the system allow the system to be economically secure and stable long-term). This is divided into two categories for stablecoins: incentive security, which is a subset of economic security, and economic stability, which is an additional inquiry into whether an economically secure system reaches the intended equilibrium. Similar questions to economic stability apply to protocols other than stablecoins as well. For instance, when designing synthetic derivatives built using dynamic portfolios (and implemented as AMM pools), a lingering question is how well these designs can replicate the derivative payoffs under extreme conditions. As a comparison, synthetic portfolio insurance in traditional markets can break down when markets move too fast for the strategy to rebalance. AMM pools aim to rebalance over much shorter timescales, and so may have an advantage here, but are also suboptimal in other areas of rebalancing. What is a DeFi Exploit mathematically ? Stay tuned ! cc Chainrisk ( prev UNSNARL )

Dive into the world of Bitcoin and economics with key insights from "The Bitcoin Standard". What lessons have you learned from this influential book? #Bitcoin #Economics #LearningFromBooks

Together with Hugo May & Justin Rogers, I am thrilled to announce the launch of Just Cryptoeconomics! Over the past six months, we have been working on a new and exciting project. Today, we are excited to unveil Just Cryptoeconomics, a research group dedicated to the study and advancement of cryptoeconomics—a nascent field that intersects technology and economics and concerns the design and analysis of digital economies. Beginning as a non-profit research group, our mission is to produce and share open-access research, content, and resources on cryptoeconomics and token design. We aim to influence thinking and best practices while developing and sharing ideas, frameworks, and models with businesses, organisations and the general public. To mark our launch, we are releasing the first instalment of a five-part introductory series titled ‘Why Cryptoeconomics Matters.’ This article makes a compelling case for the importance of cryptoeconomics. Over the next four weeks, we will continue the series, defining the subject matter, documenting its history, current state, and where we hope to influence its direction. We are grateful for the experience and training we received from our time at Smith + Crown, where we learned from some of the top minds in the field. Token Architecture, my own cryptoeconomics design agency, will sit alongside Just Cryptoeconomics as a commercial entity, contributing to and benefiting from the ideas that we incubate and develop as a broader group. I am grateful to my colleagues at Just Cryptoeconomics, Hugo May and Justin Rogers, for what we have built together and now look forward to sharing with the public. In addition to sharing ideas, we hope to foster a community of fellow practitioners, builders, investors, and other industry participants, as well as those interested in learning more about the nascent field of cryptoeconomics. We invite you to follow us on X, join our Telegram channel and visit our website to stay updated on our latest research, content, and events. https://lnkd.in/ekKCyH8A #JustCryptoeconomics #Cryptoeconomics #TokenDesign #Blockchain

New Post: Glassnode and Ark Invest Introduce ‘Cointime Economics’ — A New Model to Measure Bitcoin’s Value - https://lnkd.in/eTQwPggA from Glassnode and Ark Invest have collaborated to develop a new economic model for analyzing Bitcoin’s onchain metrics called “Cointime Economics.” The framework offers an alternative way to measure the economic activity and value of bitcoin based on “coinblocks” rather than the standard accounting method of unspent transaction outputs, or UTXOs. Cointime Economics: A […]