CONFIDENCE MATTERS: A SIMULATION-BASED STABILITY ANALYSIS OF ALGORITHMIC STABLECOINS

2023 | European Conference On Information Systems | Citations: 0

Authors: Baumeister, Alexander; Hägele, Sascha

Abstract: ... Expand

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Topics: stablecoin Ethereum cryptocurrency

Methods: simulation Monte Carlo simulation agent based simulation

Blockchain-based digital rights management systems: Design principles for the music industry

2023 | Electronic Markets | Citations: 0

Authors: Ciriello, Raffaele Fabio; Torbensen, Alexandra Cecilie Gjøl; Hansen, Magnus Rotvit Perlt; Müller-Bloch, Christoph

Abstract: Initially designed to protect intellectual property (IP) of digitalized informat ... Expand

Abstract: Initially designed to protect intellectual property (IP) of digitalized information goods such as music, games, or books, existing centralized digital rights management (DRM) systems mostly serve the interests of major publishers, with scant inclusion of rights owners, creators, and consumers. Although various blockchain-based DRM systems have been proposed, most of them mirror existing counterproductive IP restrictions. Analyzing the music industry as a case in point, this paper proposes design principles for blockchain-based DRM systems that provide an integrated and flexible solution by enabling transparent music licensing structures, consistent and complete rights metadata, and efficient and transparent royalty payout. The solution can be achieved by storing rights metadata on a public distributed ledger, by validating metadata through a consensus mechanism on a permissioned blockchain, and by algorithmically enforcing royalty payout via stablecoin through a smart contract. The design principles were evaluated by industry experts, validating their benefit for the music industry by increasing surplus value that is currently destroyed through previous suboptimal designs. Collapse

Topics: blockchain stablecoin smart contract distributed ledger technology cryptocurrency

Methods: design principle design requirement qualitative interview design artifact design science

Theories: transaction cost economics socio technical theory

A Taxonomy of Violations in Digital Asset Markets

2023 | International Conference on Information Systems | Citations: 0

Authors: Clapham, Benjamin; Jakobs, Jenny; Schmidt, Julian; Gomber, Peter; Muntermann, Jan

Abstract: Numerous frauds, market manipulations and other violations have recently shaken ... Expand

Abstract: Numerous frauds, market manipulations and other violations have recently shaken investor confidence in digital asset markets and digital assets themselves. Yet, investor confidence and market integrity are key requirements for the continued success of crypto and other digital assets. In order to facilitate the integrity of digital asset markets and avoid integrity incidents in the future, a systematic overview of violations and their main characteristics is needed to develop appropriate countermeasures. Therefore, we develop a taxonomy of violations in digital asset markets and evaluate the taxonomy based on real-world cases. Our results show that many types of market manipulation in traditional financial markets can also be observed in digital asset markets. However, there are new and additional violations in digital asset markets. We also find that many violations depend on specific capabilities of the violator, certain trading conditions, and asset-specific characteristics. Collapse

Topics: IT security threat crypto wallet accounting information technology infrastructure smart contract

Methods: robustness check cluster analysis

A multivocal literature review of decentralized finance: Current knowledge and future research avenues

2023 | Electronic Markets | Citations: 2

Authors: Gramlich, Vincent; Guggenberger, Tobias; Principato, Marc; Schellinger, Benjamin; Urbach, Nils

Abstract: While decentralized finance (DeFi) has the potential to emulate and, indeed, out ... Expand

Abstract: While decentralized finance (DeFi) has the potential to emulate and, indeed, outperform existing financial systems, it remains a complex phenomenon yet to be extensively researched. To make the most of this potential, its practitioners must gain a rigorous understanding of its intricacies, as must information systems (IS) researchers. Against this background, this study uses a multivocal literature review to capture the state of research in DeFi. Thereby, we (1) present a consolidating definition of DeFi as we (2) analyze, synthesize, and discuss the current state of knowledge in the field of DeFi. We do so while adapting the blockchain research framework proposed by (Risius and Spohrer, Business & Information Systems Engineering 59:385–409, 2017). Furthermore, we (3) identify gaps in the literature and indicate future research directions in DeFi. Even though our findings highlight several shortcomings in DeFi that have prevented its widespread adoption, our literature review shows a large consensus on DeFi’s many promising features and potential to complement the traditional financial system. To that end, this paper is presented to encourage further research to mitigate the current risks of DeFi, the payoff of which will be an enriched financial ecosystem. Collapse

Topics: decentralized finance financial information system blockchain database system Ethereum

Methods: literature study literature sample structured literature research synthesis

Theories: organizational theory

CRYPTOCURRENCIES, STABLECOINS AND CENTRAL BANK DIGITAL CURRENCIES: THE IMPACT OF TRUST AND PERCEIVED RISK

2023 | European Conference On Information Systems | Citations: 0

Authors: Hamm, Peter

Abstract: Financial technology is undergoing rapid developments with the arrival of crypt ... Expand

Abstract: Financial technology is undergoing rapid developments with the arrival of cryptocurrencies, the introduction of stablecoins, and more recently the discussion surrounding central bank digital currencies. The adoption of these technologies has received significant attention, but there has not yet been any research as to how the adoption factors for the three currencies differ, given their inherent similarities. This paper proposes to estimate the effect of trust and perceived risk on the adoption intention of the three aforementioned payment systems by creating three closely-matched questionnaires for each digital currency. This will enable us to estimate the effects of risk and trust in a way that makes it possible to compare the effect sizes for the different technologies, and can help evaluate whether a reduction of perceived market risk is sufficient for cryptocurrency adoption, and whether backing by the central bank may confer more benefits to adoption than the trustlessness touted for cryptocurrencies. Collapse

Topics: stablecoin cryptocurrency IT security threat self efficacy social commerce

Methods: survey meta analysis

Theories: unified theory of acceptance and use of technology technology acceptance theory

Cryptocurrency Rewards and Crowdsourcing Task Success

2023 | HICSS | Citations: 0

Authors: Meng, Shan; Zhao, Xia; Zhao, Xi

Abstract: Crowdsourcing task success depends on the contributions of developers. How to id ... Expand

Abstract: Crowdsourcing task success depends on the contributions of developers. How to identify capable developers and motivate them to actively contribute to a task is a challenging issue. This study investigates how the use of cryptocurrency rewards, i.e., the choices of stablecoins and unstablecoins affects the crowdsourcing task success, and how the relationship depends on task difficulty. Based on 3858 crowdsourcing tasks, we find that the use of unstablecoins reduces the number of participating contributors and extends the time period of having the first contributor, but has no significant effect on the likelihood of task success. In addition, task difficulty alleviates the negative effect of the unstablecoins on the number of participants. Our study potentially provides important implications for the use of cryptocurrency tokens as task rewards. Collapse

Topics: crowdsourcing cryptocurrency stablecoin task characteristic open source

Methods: experimental group regression analysis method propensity score matching survival analysis hazard function

When Stablecoin is No Longer Stable - A Case Study on the Failure of TerraUSD

2023 | International Conference on Information Systems | Citations: 0

Authors: Nurbaev, Vladimir; Au, Cheuk Hang; Chou, Chih-Yuan

Abstract: Comparing to other price-volatile cryptocurrencies, stablecoins provide a relia ... Expand

Abstract: Comparing to other price-volatile cryptocurrencies, stablecoins provide a reliable way to store value and make transactions, and thus are more suitable for daily-life usage and investment risk control. However, there remains a lack of understanding of how stablecoin can gain success. This may lead to the introduction of stablecoins based on uninformed proposals, which may eventually fail. In turn, owners of these stablecoins may suffer from significant financial losses. Using theories of Information Systems and digital startups failures as the theoretical foundation, our study identified four underlying factors (lack of scarcity, lack of fiat reserve backup, decentralization, and failure of value creation) and two triggers (massive selling by major investors and algorithm malfunction) behind the collapse of a stablecoin, based on the case of TerraUSD's collapse. Our findings provide implications for stablecoins issuers to prioritize maintenance and foster user adoption, thus increasing the likelihood of success of stablecoins. Collapse

Topics: stablecoin value creation backup digital entrepreneurship social media

Methods: qualitative coding case study field study netnography business process modeling

Mindful Design and Operation for High Reliability Autonomous Systems

2023 | European Conference On Information Systems | Citations: 0

Authors: Schwiderowski, Jan; Beck, Roman

Abstract: Autonomous systems (ATS) enabled by blockchain and artificial intelligence are ... Expand

Abstract: Autonomous systems (ATS) enabled by blockchain and artificial intelligence are hailed to revolutionize our lives and economy. However, ethical concerns and a lack of trust in machines making decisions on their own may explain why these systems are not yet embraced in large scale implementations. In blockchain-based ATSs, doubts have been fueled by failures of large crypto projects believed to be secure, such as the meltdown of the Terra/Luna algorithmic stablecoin (ASC). In this research, we analyze the failure of this ASC system through the lens of mindfulness using secondary data like the project's whitepaper and an interview with its chief executive officer. Hence, we make two contributions: First, we explore and argue for the possibility to mindfully design and operate ATSs as digital high reliability organizations. Second, we build a punctuated equilibrium model of mindfulness in systems. We thus extend the understanding of the design and management of ATSs. Collapse

Topics: mindfulness decision making blockchain stablecoin Google+

Methods: qualitative interview mathematical model theoretical contribution

Theories: punctuated equilibrium theory complex adaptive system information systems theory

Applying the extended attitude formation theory to central bank digital currencies

2023 | Electronic Markets | Citations: 0

Authors: Tronnier, Frédéric; Harborth, David; Biker, Patrick

Abstract: This work analyzes the attitude formation process of individuals for central ban ... Expand

Abstract: This work analyzes the attitude formation process of individuals for central bank digital currencies (CBDCs), specifically for the digital euro. CBDCs are heavily researched, with pilot projects being conducted worldwide. Following the emergence of cryptocurrencies and a decrease in cash usage for retail transactions, CBDCs are viewed as the possible payment solution of the future. Using a qualitative approach, we conduct expert and non-expert interviews to apply and extend existing research on attitude formation to study how individuals form attitudes towards a CBDC in Germany. We find that individuals form their attitudes towards a digital euro through the perceived benefits, limitations, and concerns regarding related payment solutions, moderated through the perceived equivalence of these related technologies and the CBDC. The results contribute to the literature on CBDC and can be used by practitioners to develop a digital euro that offers a competitive advantage for retail transactions over established payment solutions. Collapse

Topics: user attitude technology adoption stablecoin information privacy concern electronic payment

Methods: qualitative interview qualitative content analysis personal interview literature study grounded theory

Theories: technology acceptance model unified theory of acceptance and use of technology extended unified theory of acceptance and use of technology

The De-Central Bank in Decentralized Finance: A Case Study of MakerDAO

2022 | HICSS | Citations: 0

Authors: Brennecke, Martin; Guggenberger, Tobias; Schellinger, Benjamin; Urbach, Nils

Abstract: Countless decentralized finance (DeFi) applications of the past years have suffe ... Expand

Abstract: Countless decentralized finance (DeFi) applications of the past years have suffered from the high volatility and speculative behavior surrounding their underlying crypto assets. While the academic debate has been flourishing in these areas, Decentralized Autonomous Organizations (DAOs) have not received as much attention. This is the case even though they could offer an opportunity to solve some of the underlying problems of existing cryptocurrencies and ecosystems, for example, by providing lower volatility and, thus, exchange rate stability. This paper presents an economic analysis of the MakerDAO, a DAO in DeFi. In doing so, we use a single case study methodology based on existing resources and expert interviews. It also uses monetary theory instruments to provide researchers and developers with insights into how DAOs are governed. Further, it serves to illustrate how IS research may support the development of future IT artifacts aimed at offering the infrastructure for DeFi applications. Collapse

Topics: decentralized finance blockchain stablecoin financial information system cryptocurrency

Methods: qualitative interview case study single case study personal interview design artifact