economics & computation, airdrops sans namedrops, more
1. Research: advances in economics and computation
Blockchains necessitate a rethinking of classic mechanism design problems from first principles. Advances here have the potential to influence the evolution of web3 at the infrastructure layer and the application layer. (See, for example, Ethereum’s EIP-1559 upgrade.) When the internet's key protocols like BGP routing and TCP/IP congestion control were being developed in the 1970s and 1980s, the algorithmic game theory community didn't even exist yet, let alone have a seat at the table. That’s the gist of a keynote delivered by head of a16z crypto research Tim Roughgarden at the 2022 ACM Conference on Economics and Computation (EC).
Now in its 23rd year, EC is the leading scientific conference covering advances in theory, empirics, and applications at the interface of economics and computation. So we’ve curated some of the notable papers/talks presented this week, below:
Designing transaction fee mechanisms / Hao Chung, Elaine Shi
Optimal strategic mining against cryptographic self-selection in proof-of-stake / Matheus Ferreira, Ye Hahn, Matthew Weinberg, Catherine Yu
Provisioning efficient computing capacity for global firms using public cloud / Patrick Hummel, Michael Schwarz
Crowdsourcing and optimal market design / Bobak Pakzad-Hurson
Linear pricing mechanisms for markets without convexity / Paul Milgrom, Mitchell Watt
[see also this live-tweet thread surveying several presentations]
2. Market design: ‘redistributive allocation mechanisms’
Mohammad Akbarpour, Piotr Dworczak, and Scott Duke Kominers
Presented at a16z crypto research last week was a new version of a 2020 paper that explores how marketplace designers can think about the tradeoffs between efficiency and equity. There is plenty of research literature out there on designing revenue-maximizing auctions and efficient allocation mechanisms, so the researchers here address a less well-covered area: How to use the same mechanism design approaches when there are market-level redistributive goals. This work has implications for many policy problems such as in-kind transfer programs for food and healthcare [not to mention vaccine allocation, which Kominers presented a related paper on at EC this week]. In crypto, it has applications for organizing NFT sales, DAO token governance distribution, and more.
3. Hot debates: The network state
What if you could turn an online community into a city or a state? That's part of the premise, and framework, proposed by Balaji Srinivasan in his new book The Network State. This week, Vitalik Buterin, co-creator of Ethereum, offered a long review of Srinivasan's ideas – including whether or not it makes sense to tie the idea together with blockchains and cryptocurrency. Srinivasan later responded that the concepts are “very much a toolbox rather than a manifesto" [he also appeared on a16z crypto general partner Sriram Krishnan’s YouTube show].
get the download on “network states” / read Vitalik’s review / watch the Good Time Show interview
4. A tool for airdropping without namedropping
Sam Ragsdale
Interested in more zero-knowledge tools and applications like the one we shared in the last edition? In case you missed it, check out this tool that uses zero knowledge proofs to protect people's identities when participating in token airdrops. Crypto airdrops are a popular way for web3 projects to bootstrap network effects by incentivizing contributors, participants, and early adopters with the possibility of rewards. But people shouldn’t have to expose their entire financial histories by publicly revealing their wallet addresses. Since the tool's release earlier this year, the code has seen several forks, adaptations, and uses in production.
learn about zero knowledge airdrops / visit Github repo
5. Brain food
Elena Burger
What would artist Mavis Staples think about DAOs? Where do crypto and AI converge? What’s the latest from the Ethereum Foundation Research team? a16z crypto investing partner Elena Burger describes what info she consumes on a typical day across a wide range of media from music to videos to newsletters – and across a wide range of topics well beyond crypto. But as she notes, “even non-crypto news is crypto related: chip shortages, inflation, entertainment, etc. – it’s all related.”
…🤯
--Sonal Chokshi, Robert Hackett, Scott Duke Kominers, Tim Roughgarden, and a16z crypto team
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