Token Composition: A Graph Based on EVM Logs

TL;DR

This paper empirically analyzes token composition on Ethereum by introducing a graph model that captures token-to-token relationships, revealing complex topological structures and insights into tokenization processes.

Contribution

It introduces a novel graph-based framework to analyze token composition, uncovering the topological properties and structures of tokenization on Ethereum.

Findings

Identifies non-trivial topological structures in token graphs

Highlights the longest tokenization paths and their sequences

Visualizes connected components related to specific token types

Abstract

Tokens have proliferated across blockchains in terms of number, market capitalisation and utility. Some tokens are tokenised versions of existing tokens -- known variously as wrapped tokens, fractional tokens, or shares. The repeated application of this process creates matryoshkian tokens of arbitrary depth. We perform an empirical analysis of token composition on the Ethereum blockchain. We introduce a graph that represents the tokenisation of tokens by other tokens, and we show that the graph contains non-trivial topological structure. We relate properties of the graph, e.g., connected components and cyclic structure, to the tokenisation process. For example, we identify the longest directed path and its corresponding sequence of tokens, and we visualise the connected components relating to a stablecoin and an NFT protocol. Our goal is to explore and visualise what has been wrought with tokens, rather than add yet another brick to the edifice.