🤖 AI Summary
This study addresses the lack of systematic modeling approaches for token economies and quantitative analysis of event impacts. Building upon the DeTEcT framework, it proposes the first integrated methodology that combines formal token economy simulation with significance-based measurement of event effects. By introducing an event impact analysis framework augmented with numerical simulation techniques and wealth distribution metrics, the work enables quantitative assessment of wealth redistribution effects triggered by endogenous policy changes—such as Bitcoin Improvement Proposals (BIPs). Using Bitcoin as a case study, the approach demonstrates its effectiveness and practicality in capturing economic dynamics and evaluating the consequences of significant protocol-level events.
📝 Abstract
The objective of this paper is to provide a methodology for applying the DeTEcT framework to modelling token economies, to formalise the configuration of the simulation environment, and to introduce an event analysis framework. A token economy is an economic system that has a unique mechanism for controlling its monetary supply, and a medium, in the form of a token or currency, for the valuation of goods and services, the settlement of transactions, and the storage of value. We show the key decisions that must be made when modelling an economy with the DeTEcT framework and showcase some numerical methods that can be used in conjunction with the framework to perform economic simulations. We also propose a framework for analysing and measuring the impacts of events on an economy, while also developing a procedure to measure the significance of these impacts.
Throughout the paper, we use Bitcoin as a case study to demonstrate how to apply the frameworks and tools we proposed here. We show how a model of Bitcoin token economy can be set up, and how to measure the impacts of Bitcoin's endogenous policies (i.e., BIPs) on the wealth distribution of its economic participants.