Token Exchange Games
This foundational work addresses a gap in formal understanding of tokenized systems like banking and blockchain, potentially impacting all of ML/AI by providing a new paradigm for analyzing economic networks.
The paper tackles the problem of understanding tokenized systems as large-scale, iterative structures by studying token exchange dynamics as a game, introducing a mathematical framework to model ledgers as complex networks.
Human societies engage in a number of games which use tokens as a means to allocate, issue and access gated resources and property rights: The notion of exchanging tokens that represent and carry value from the past into the future to facilitate economic exchange is a fundamental concept. As agents exchange tokens a network structure is created in which the tokens move from agent to agent. Agents form the vertices in the network and the exchange of tokens creates the link structure. The rules of exchange adopted collectively by agents shape the network structure and affect the distribution of tokens amongst agents. Many inventions including banking, payments networks and blockchain technology have been created for the purpose of keeping accurate records of these implicit networks. However, our formal understanding of tokenised systems as large scale, iterative, interacting structures is limited. The aim of this paper is to study the dynamics of token exchanges as a game, and introduce a mathematical framework for understanding ledgers as complex networks.