{"type": "project", "title": "Burn-and-mint tokenomics", "logoImg": "bafkreifbml4clbsecpfj36exbd6maot7xctmahhu7k4i6zsn5rqyzx5kg4", "website": "https://res.uros.kalabic.rs/projects/bme", "createdAt": 1681842688188, "userGithub": "urosvk", "credentials": {"twitter": {"type": ["VerifiableCredential"], "proof": {"jws": "eyJhbGciOiJFZERTQSIsImNyaXQiOlsiYjY0Il0sImI2NCI6ZmFsc2V9..xIycRBsXrODIawXWwLU7zQLctWrw2UoPuAwEkzAPB3M7-Cl6nRP_UGkD4XQlJcCTyZj1kDa-aqGEogQsOebaCA", "type": "Ed25519Signature2018", "created": "2023-04-18T18:30:32.340Z", "proofPurpose": "assertionMethod", "verificationMethod": "did:key:z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC#z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC"}, "issuer": "did:key:z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC", "@context": ["https://www.w3.org/2018/credentials/v1"], "issuanceDate": "2023-04-18T18:30:32.340Z", "expirationDate": "2023-07-17T18:30:32.340Z", "credentialSubject": {"id": "did:pkh:eip155:1:0x7f3eb18E46bC6350722f981e8750DE6d0655509a", "hash": "v0.0.0:8jb8h9DcNbXsSQ0kqn8qTrFlhK+iIuMX1nbCng61qBM=", "@context": [{"hash": "https://schema.org/Text", "provider": "https://schema.org/Text"}], "provider": "ClearTextTwitter#urosnoetic"}}}, "description": "I am doing research into the tokenomics of burn-and-mint equilibrium (BME). Here are two blog posts I've made on the topic ([1](https://blog.uros.kalabic.rs/valuing-burn-and-mint), [2](https://blog.uros.kalabic.rs/adequate-burn-and-mint-rewards)). A major insight of these works is how one should choose the rate of new token mints. The choice of this inflation rate is similar to the choice of a fiat currency\u2019s interest rate.\n\nSo far, the work I've done considers that all participants have full information about each others intentions and share the same valuation of the network. Detailed proofs exist that back my work up, so I am starting the next step.\n\nThis grant seeks to fund my work on expanding the full-information case to consider partial-information frameworks, where agents would have individual beliefs about the value of the economy and then infer the beliefs of other agents through observations of the market. I will study the dynamics that result from such games and see if we could tweak tokenomic parameters to avoid volatility and ensure stable economic growth.\n\n\u2028I am not alone in this work, and already have a few collaborators who I am working with from the fields of cryptoeconomics and economic game theory.\u2028\n\nAs for impact, I envision that this work would have various types. Here they are in order of immediate to long-term: Firstly, the aim is to make BME models acceptable by growing our understanding of them. Secondly, the aim is to help break into the mainstream by publishing this work at conference such as Economics and Computation and Financial Cryptography. Thirdly, this work is in no way limited to web3, let alone burn-and-mint; financial systems, whether fiat- or crypto-based, have similar dynamics; web3 allows us to measure and experiment in ways that have been thus far impossible, so my hope is that we might learn how to improve traditional economic designs, such as, for example, algorithmically setting interest rates.", "logoImgData": {}, "projectTwitter": "urosnoetic"}
Burn-and-mint tokenomics
I am doing research into the tokenomics of burn-and-mint equilibrium (BME). Here are two blog posts I've made on the topic ([1](https://blog.uros.kalabic.rs/valuing-burn-and-mint), [2](https://blog.uros.kalabic.rs/adequate-burn-and-mint-rewards)). A major insight of these works is how one should choose the rate of new token mints. The choice of this inflation rate is similar to the choice of a fiat currency’s interest rate.

So far, the work I've done considers that all participants have full information about each others intentions and share the same valuation of the network. Detailed proofs exist that back my work up, so I am starting the next step.

This grant seeks to fund my work on expanding the full-information case to consider partial-information frameworks, where agents would have individual beliefs about the value of the economy and then infer the beliefs of other agents through observations of the market. I will study the dynamics that result from such games and see if we could tweak tokenomic parameters to avoid volatility and ensure stable economic growth.

 I am not alone in this work, and already have a few collaborators who I am working with from the fields of cryptoeconomics and economic game theory. 

As for impact, I envision that this work would have various types. Here they are in order of immediate to long-term: Firstly, the aim is to make BME models acceptable by growing our understanding of them. Secondly, the aim is to help break into the mainstream by publishing this work at conference such as Economics and Computation and Financial Cryptography. Thirdly, this work is in no way limited to web3, let alone burn-and-mint; financial systems, whether fiat- or crypto-based, have similar dynamics; web3 allows us to measure and experiment in ways that have been thus far impossible, so my hope is that we might learn how to improve traditional economic designs, such as, for example, algorithmically setting interest rates.
Burn-and-mint tokenomics