Talk recording available on TokenEngineering YouTube: https://youtu.be/O4i1NxT3B74 --- Decentralised tokenised systems emerge since the advent of the blockchain technology and the increased trust in the potential of decentralised applications thereof. Many envisaged systems are meant to be steered by cryptographic tokens which are used to incentivise specific behaviour of agents and to align the interest of individuals to the purpose of the system. Out of this development, the necessity of scientifically explored design and development principles becomes apparent. Using tools and methods provided by various scientific disciplines will help with investigating and explaining the dynamics of the systems as well as their economic consequences for participants and the environment. Token Engineering is this new scientific discipline which equippes us with the methodology to design, model and simulate decentralised ecosystems and their mechanisms. This helps to capture and control the potential involvement of the system over time, since gained insights will feed back into the design process. Token Engineering uses tools from mathematics, physics, biology, computer science and engineering and applies them within the domain of economics. In this talk Kris Paruch from the Research Lab for Cryptoeconomics in Vienna will - provide a structured approach to the definition of Token Engineering as a scientific field - introduce a taxonomy of the Token Engineering process - map various disciplines and their subdisciplines to the process - show which tools and methods can be applied to Token Engineering - explain the focus and the research roadmap of the research lab. About the speaker: Krzysztof Paruch, Token Engineer and Cryptoeconomist at the Research Lab for Cryptoeconomics, WU Vienna The profile of Krzysztof Paruch comprises all the essential building blocks of cryptoeconomics. He laid his academic fundament as an MSc in technical-economic Mathematics at the University of Technology in Vienna. His specializations are agent-based economic modeling, game theory and optimization methods as well as monetary and environmental policy economics. With five years working experience in banking and software integration he understands the financial and regulatory background at the intersection of real-world and cryptocurrency economics. His focus at the Research Institute for Cryptoeconomics at WU Vienna is the development of standards for token engineering, creation of network design and incentive mechanism structures and valuation and modelling of cryptoassets. Twitter: @paruch1 Linkedin: https://www.linkedin.com/in/kris-paruch/ Join the TokenEngineering community, discuss and learn more! Get updates, subscribe for our newsletter https://tegg.io/ Explore learning material at our wiki https://tokenengineering.net Follow us on Twitter https://twitter.com/tokengineering and https://twitter.com/tegg_io

1. Token Engineering
A new scientific discipline
Krzysztof Paruch
Research Institute for Cryptoeconomics, Vienna
@crypto3conomics
@paruch1

2. Automated Systems

3. Automated Systems

6. Complex Systems
▪ Collection of sub-systems
▪ Interdependent
▪ Effects cannot be disentangled
▪ Analysis only when interfaces
defined
▪ Feedback loops reinforce dynamics

7. Dynamic Systems
▪ Time plays a role
▪ Snapshots allow only for limited
understanding
▪ Time aspect crucial for
understanding future development
▪ Design and Control needs to
explicitly consider dynamics

8. Multiscale + Abstraction Hierarchy
▪ Representation in different scales
▪ Allows to zoom in or out
▪ As many layers as needed
▪ Special order of succession
▪ Connection between layers...

9. Foundations + Context
▪ ...relations between each
micro-macro pair
▪ Top-down: aggregate relationships
have to be consistent with
fundamentals
▪ Bottom-up: Principles have to be
put in context to higher level

10. Different Perspectives
▪ Added value to analysis by viewing
from different angles
▪ Specific characteristics become
visible only then

11. Purpose Driven
▪ Environment with specific goal or
purpose
▪ Intrinsic attraction towards this
goal
▪ System design supports realization
of goals
▪ Compliance is natural

12. Dynamic Control
▪ Continuous navigation is required
▪ Setup at inception is not sufficient
▪ Shocks and unknown events call for
corrections
▪ Reevaluation of system state at
every point in time

13. Information / Data Overflow
▪ Huge amount of data available
▪ Not everything seen or understood
▪ Not all information can be included
in evaluation

14. Simplification
▪ Complexity forces us to make
simplifications
▪ Models and methods work under
restrictive assumptions
▪ Conclusions and results with
limited validity

15. Computational Power
▪ Digital world provides precise
information about environment
and activities
▪ High processing power of modern
machines allows for sophisticated
calculations

16. FUSSZEILESEITE 16
● What is Token Engineering?

17. What is Token Engineering?
▪ Purpose - Driven Systems
▪ Cyber - Physical Economies
▪ Incentive Design
▪ Automation

18. The Job of a Token Engineer
▪ Discover / Design / Deliver
▪ Model / Simulate / Tune
▪ Build digital twins
▪ System Architect

19. Economic Controls
▪ Governance aims to reach set goals
▪ Set policies based on observable
metrics & KPIs
▪ Markets need guidance
▪ Shocks from inside & outside
▪ Goals might have trade-offs
▪ Policies are sets of instrument
parameters

20. How to model?
▪ Use different layers
▪ Global Economy
▪ Embedded (Sub-)Systems
▪ State update logic and KPIs
▪ Connect layers
▪ Microfoundations
▪ Macrocontextualization

23. Web: http://wu.ac.at/cryptoeconomics
Twitter: @crypto3conomics
Linkedin: @crypto3conomics
Facebook: @crypto3conomics