DROPS

Document

DOI: 10.4230/OASIcs.Tokenomics.2021.8

Optimal Design of Tokenized Markets

Authors: Michael Junho Lee, Antoine Martin, and Robert M. Townsend

Published in: OASIcs, Volume 97, 3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021)

Abstract

Trades in today’s financial system are inherently subject to settlement uncertainty. This paper explores tokenization as a potential technological solution. A token system, by enabling programmability of assets, can be designed to eradicate settlement uncertainty. We study the allocations achieved in a decentralized market with either the legacy settlement system or a token system. Tokenization can improve efficiency in markets subject to a limited commitment problem. However, it also materially alters the information environment, which in turn aggravates a hold-up problem. This limits potential gains from resolving settlement uncertainty, particularly for markets that depend on intermediaries.

Cite as

Michael Junho Lee, Antoine Martin, and Robert M. Townsend. Optimal Design of Tokenized Markets. In 3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021). Open Access Series in Informatics (OASIcs), Volume 97, p. 8:1, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2022)

Copy BibTex To Clipboard

@InProceedings{lee_et_al:OASIcs.Tokenomics.2021.8,
  author =	{Lee, Michael Junho and Martin, Antoine and Townsend, Robert M.},
  title =	{{Optimal Design of Tokenized Markets}},
  booktitle =	{3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021)},
  pages =	{8:1--8:1},
  series =	{Open Access Series in Informatics (OASIcs)},
  ISBN =	{978-3-95977-220-4},
  ISSN =	{2190-6807},
  year =	{2022},
  volume =	{97},
  editor =	{Gramoli, Vincent and Halaburda, Hanna and Pass, Rafael},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/OASIcs.Tokenomics.2021.8},
  URN =		{urn:nbn:de:0030-drops-159051},
  doi =		{10.4230/OASIcs.Tokenomics.2021.8},
  annote =	{Keywords: Tokenization, programmability, settlement uncertainty, asymmetric information}
}

Search Results

Documents authored by Lee, Michael Junho

Optimal Design of Tokenized Markets

Abstract

Cite as

Thanks for your feedback!

Could not send message