Crypto-asset Taxonomy for Investors and Regulators

TL;DR

This paper introduces a comprehensive multidimensional taxonomy for crypto-assets, linking technical features to market and regulatory aspects, aiding regulators, investors, and platform designers in understanding and comparing crypto-assets.

Contribution

It develops a novel, structured taxonomy framework for crypto-assets based on theory, regulation, and case studies, integrating various dimensions like technology, legal classification, and mechanism design.

Findings

Mapping of top 100 crypto-assets reveals common design patterns.

Identification of edge cases and boundary assets in current classifications.

Documentation of centralised control in nominal decentralised assets.

Abstract

Crypto-assets are a main segment of electronic markets, with growing trade volume and market share, yet there's no unified and comprehensive asset level taxonomy framework. This paper develops a multidimensional taxonomy for crypto-assets that connects technical design to market structure and regulation. Building on established taxonomy guideline and existing models, we derive dimensions from theory, regulatory frameworks, and case studies. We then map top 100 assets within the structure and provide several detailed case studies. The taxonomy covers technology standard, centralisation of critical resources, asset function, legal classification and mechanism designs of minting, yield, redemption. The asset mapping and case studies reveal recurring design patterns, capture features of edge cases that sit on boundaries of current categorisations, and document centralised control of nominal decentralised assets. This paper provides framework for systematic study for crypto markets, supports regulators in assessing token risks, and offers investors and digital platform designers a tool to compare assets when building or participate in electronic markets.