Buy-or-Rent Decisions in a Two-Token Blockchain Network

Winter, Boris (2022) Buy-or-Rent Decisions in a Two-Token Blockchain Network. Master's Thesis / Essay, Artificial Intelligence.

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Abstract

VeChainThor is a blockchain network that uses a two-token model in which the main token generates gas tokens, and the gas tokens are used to pay for network use. This model yields what we call the VeChain Decision Problem (VDP): network users need to decide between buying gas tokens directly, or buying main tokens to generate the gas tokens. In the field of online algorithms, the Ski Rental Problem refers to a collection of problems in which one needs to decide between renting or buying. Here, we map the VDP to the Ski Rental Problem while exploring the features that make the VDP unique. We identify and model the direct relationship between user decisions and buy/rent prices that cryptocurrency exchanges provide through limit order books. We consider online algorithms that optimally solve Ski Rental Problems, and we analyze their performance in the VDP. We explore the effect of using these algorithms on the users’ adoption behavior. Results suggest that the consistency in performance of deterministic algorithms makes them more appropriate for use in the VDP than randomized algorithms. Results also show that trends in the buy-to-rent price ratio influence user performance and adoption behavior. Finally, simulations in a multi-agent setting suggest that user performance is affected by the strategies applied by other users. Future studies are encouraged to advance multi-agent research of this problem, and to improve the existing algorithms by incorporating price predictions.

Item Type:	Thesis (Master's Thesis / Essay)
Supervisor name:	Grossi, D. and Weerd, H.A. de
Degree programme:	Artificial Intelligence
Thesis type:	Master's Thesis / Essay
Language:	English
Date Deposited:	11 Oct 2022 13:40
Last Modified:	11 Oct 2022 13:40
URI:	https://fse.studenttheses.ub.rug.nl/id/eprint/28826

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