Purpose-Driven Tokens
Description
Shermin Voshmgir and Michael Zargham:
Purpose-driven tokens are tokens that are programmed to steer automated collective action of autonomous network actors in a public network towards a collective goal in the absence of intermediaries [Voshmgir 2020]. They represent complex token systems and require complex system approach [Foster and Metcalfe 2012][Kurtz and Snowden 2003] to be modelled. Purpose-driven tokens that enable complex token systems differ from simple token systems in that they close the loop in so far as the system becomes autonomous and is not being steered by single institutions. Complex token systems requires mostly economic systems engineering, which we define on the intersection of information systems and economics including political economy and other related social science domains. Economic systems engineering can build on systems engineering [Sage 1992], [Blanchard and Fabrycky 1990],[Novikov 2016], but deals with research questions that model and steer aggregate agent behaviour, which brings us into the emerging field of complex systems engineering [Bar-Yam 2003] [Rhodes and Hastings 2003] that requires a multi-scale perspective on how to steer these systems."
(https://epub.wu.ac.at/7782/1/Foundations%20of%20Cryptoeconomic%20Systems.pdf)
Discussion
Bitcoin's Use of Purpose-Driven Token Commons as Incentive Mechanism for Network Actor Coordination
Shermin Voshmgir and Michael Zargham:
"Bitcoin’s proof-of-work [Nakamoto 2008] introduced an incentive mechanism to get network actors to collectively manage a distributed ledger in a truthful manner, by rewarding them with network tokens which are minted upon proof-of a certain behaviour. The idea of aligning incentives among a tribe of anonymous actors with a network token, introduced a new type of public infrastructure that is autonomous, self-sustaining, and attack resistant [Voshmgir 2020]. Such networks, therefore, represent a collectively produced and collectively consumed economic infrastructure. This common economic infrastructure can be viewed as a commons whose design and governance should be held to Ostrom’s principles [Ostrom 1990]. If there is an underlying optimal choice to be uncovered through a social process there is some hope that this optimal could be learned via a consensus process [Jadbabaie et al. 2012]. However, it is more realistic to take a polycentric viewpoint where there is no one social optimum and thus it is important to take a wider view of social choice [Arrow 2012] [Ostrom 2000] before embarking on the design of a purpose-driven token. After all, any choice of coordination objective is a subjective choice. Assuming one can define a common objective, the token designer would encode this objective as a cost function and strive for dynamic stability around a minimum cost outcome over time as is done with dynamic potential games [Candogan, Ozdaglar and Parrilo 2013], swarm robotics [Gazi and Passino 2003] and vehicle formations[Olfati-Saber and Murray 2002]. In all cases the design goal is strong emergence around some objective [Klein et al. 2001]. It is also possible to envisage the objective selection process as dynamic consensus [Kia et al. 2019]. Broadly speaking purpose-driven token design lives at the boundary of behavioral economics and dynamic decentralized coordination in multi-agent systems which bridges with institutional economics[Coase 1998], and in particular platform economics [Rochet and Tirole 2003]."
(https://epub.wu.ac.at/7782/1/Foundations%20of%20Cryptoeconomic%20Systems.pdf)