Token Curated Registries - A Game Theoretic Approach

TL;DR

This paper models token curated registries (TCRs) using game theory to analyze challenge and voting dynamics, providing insights into conditions affecting acceptance, rejection, and equilibrium outcomes.

Contribution

It introduces a simplified mathematical model of TCRs and analyzes it from a game-theoretic perspective, revealing conditions for challenge outcomes and equilibrium states.

Findings

Challenges depend on candidate quality thresholds

Multiple Nash equilibria can exist in voting outcomes

Strategies can be payoff dominant under certain conditions

Abstract

Token curated registries (TCRs) have been proposed recently as an approach to create and maintain high quality lists of resources or recommendations in a decentralized manner. Applications range from maintaining registries of web domains for advertising purposes (e.g., adChain) or restaurants, consumer products, etc. The registry is maintained through a combination of candidate applications requiring a token deposit, challenges based on token staking and token-weighted votes with a redistribution of tokens occurring as a consequence of the vote. We present a simplified mathematical model of a TCR and its challenge and voting process analyze it from a game-theoretic perspective. We derive some insights into conditions with respect to the quality of a candidate under which challenges occur, and under which the outcome is reject or accept. We also show that there are conditions under which the outcome may not be entirely predictable in the sense that everyone voting for accept and everyone voting for reject could both be Nash Equilibria outcomes. For such conditions, we also explore when a particular strategy profile may be payoff dominant. We identify ways in which our modeling can be extended and also some implications of our model with respect to the composition of TCRs.