Gini index based initial coin offering mechanism

Mingyu Guo, Zhenghui Wang, Yuko Sakurai

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

As a fundraising method, Initial Coin Offering (ICO) has raised billions of dollars for thousands of startups. Existing ICO mechanisms place more emphasis on the short-term benefits of maximal fundraising while ignoring the problem of unbalanced token allocation, which negatively impacts subsequent fundraising and has bad effects on introducing new investors and resources. We propose a new ICO mechanism which uses the concept of Gini index for the very first time as a mechanism design constraint to control allocation inequality. Our mechanism has an elegant and straightforward structure, which makes it explainable. It allows the agents to modify their bids as a price discovery process, while limiting the bids of whales. Under natural technical assumptions, we show that under our mechanism most agents have simple dominant strategies and the equilibrium revenue approaches the optimal revenue asymptotically in the number of agents. We verify our mechanism using real ICO dataset we collected, and confirm that our mechanism performs well in terms of both allocation fairness and revenue.

Original languageEnglish
Article number7
JournalAutonomous Agents and Multi-Agent Systems
Volume36
Issue number1
DOIs
Publication statusPublished - Apr 2022
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Artificial Intelligence

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