Making a cryptocurrency mechanism to be incentive-compatible

Youngwhan Nick Lee
1 min readAug 9, 2018

--

Suppose a cryptocurrency incentive mechanism gives away only one monotonic type of incentive. If such a mechanism is denoted by C, and participant x, and time t, then we can define the incentive compatibility as follows:

Contra-positive on x and t would be:

This formalization helps us to clearly see that designing C to be incentive compatible for all time t is very difficult, realistically impossible.

Having said it, we cryptocurrency designers must throw a challenging question to ourselves: knowing designing a monotonic-incentive mechanism is almost impossible to be incentive-compatible, how can one design a cryptocurrency mechanism to be so? We at EcoVerse(tm) team believe the impossibility largely stems to the monotonicity of the incentive mechanism. If one can introduce multiplicity to the incentive mechanism, the near impossibility can be relieved. In fact, we believe the problem is solvable by introducing carefully designed incentive mechanism.

--

--

Youngwhan Nick Lee

Was an accidental professor for a decade or so. Founder of W3C Blockchain Community. Was ISO Blockchain TC307 SG4 Convener. Now, the Project Leader Crepe.fund.