Maciej Jędrzejczyk talks about the future of the usage of blockchain in the business.

Maciej Zieliński

19 Feb 2020
Maciej Jędrzejczyk talks about the future of the usage of blockchain in the business.

We interviewed Maciej Jędrzejczyk, CEE Blockchain Leader in IBM about the future of blockchain and why this technology should adapt to business and not the other way round

You often highlight the fact that the blockchain should leave its comfort zone and integrate with the processes which are present in business. Where do you think it would be most suitable?

First and foremost in the places where the trust between the participants of the business process is limited and which creation could lead to significant reduction of costs. Lets take a look at syndicated loans. They require the participation of more than one member who is a creditor in a major undertaking, for example: structural investments. Traditionally, those types of processes between the participants of the consortium occurred relatively rarely and even if they took place they happened through a more traditional “paper form” way. The risk derived from the lack of trust between the participants had to be included in he additional operational costs, effectively lowering the profit of such initiative.
When blockchain aids our endeavours, there exists a way to overcome the distrust between the parties by trusting the automated protocol which essentially exists “below” the process. Within the context of the aforementioned example, the protocol allows us to safely and undeniably exchange the data about the responsibilities of the participants and how much money did they use on credit. In case of any disputes, this allows for quicker and more reliable way of finding and identifying the data needed to identify the party responsible for telling lies or the one having to pay the fine. So, naturally, this solution is much cheaper, considering that you would need to hire an additional arbiter to be the trusted third party if you chose to follow the traditional forms of exchanging the data. This could also let the participants avoid the potential cases in the court in case of ignition of a conflict.

Would you be able to identify a brand where there is the biggest need of solving this limited trust problem?

The problem of lack of trust exists everywhere and no brand requires more help than the other ones. We live in the reality where people don’t trust each other which makes us create third party institutions which we give that trust instead. We lend them our data about our identity and assets because we want to be able to achieve a common goal, create an added value. If want to be capable of generating the trust in a cheaper, simpler way, then blockchain is  a perfect solution.

Do you think that the blockchain solution offered by the IBM is financially viable for smaller and bigger companies?

To answer that we would have to look into the needs of the individual client. IBM offers the IBM Blockchain Platform, based on the Hyperledger Fabric, which is a highly developed blockchain protocol of the permissioned type - the one that allows for the control of access to the business network to all of its participants. IBM Blockchain Platform adds an element of support and upkeep of the enterprise class, full compatibility of the Hyperledger Fabric protocol with the containerisation platform Kubernetes and a convenient interface of automatization of business activities associated with the upkeep of business networks based on blockchain. Its essential for the companies, because the implementation of the system of production always comes with a need of an assumption of the potential risk coming from, for example, the potential downtime of applications used to support the business. If the company or the consortium decides to utilise IBM, it will receive the support needed to maintain the stability and availability of the application. Its also important to notice that the IBM Blockchain Platform can be shared in the as-a-Service model on IBM Cloud or as its full set of software, which can be installed in any IT infrastructure. As a result, it gives a full flexibility in terms of  requirements of the territoriality of data, technological preferences of the members of the business network or the assurance of being able to keep the cryptographic keys in the controlled environment. Is that a cheaper solution? If this is a matter dependent on the choice between a centralised database or a more scattered solution, this matter should be analysed with a reference to its usage. In case of choosing between the different blockchain protocols, TCO must contain not only the expected functionality but also the accessibility of the technical support, the costs of training the personnel and the costs of risk mitigation. The last element is key when we need additional privacy protection.

Will the price of the upkeep of such a solution be reduced or increased over time?

I think that it will decrease over time. It will be so because the cost of such a solution is low in comparison to the benefits it brings and because of the increasing value of the transactions that will be saved on it. Right now we are at the stage where many institutions and commercial entities are still at the stage of experimentation of creating the new business services with the usage of blockchain. As a result the value of the transactions registered in the blockchain is still yet to be measured. However, if we reach the moment where we will record the transactions describing, for example, debentures or other financial instruments worth millions, then the safety that blockchain assures will be relatively cheap in reference to the value generated by the transaction

There exist projects connected with the Hyperledger. Which ones should we pay the most attention towards?

Hyperledger is the organisation which gathers the open source community in the context of using the blockchain technology in business. At the moment there exist dozens of projects carried out by this community which is aided by the commercial entities like IBM. Our company actively assists the growth of the Hyperledger Fabric protocol and large amount of projects carried out by our company uses this technology. In its current stage, Hyperledger Fabric is a mature protocol with three years of history and its ready for its utilisation in the production. What is more, many blockchain projects, carried out independently from the IBM is based on the Hyperledger Fabric.

Would you be so kind to share with us some of the examples of such projects?

As far as IBM is considered, we can boast about the platform which works in the context of trade finance. It reduces the transaction costs dramatically between the small and medium companies which want to sell the goods in Europe. As of now there is 14 commercial banks who joined the platform and provide this service to their clients. As a result, small and medium companies could acquire the accreditive cheaper than ever and acquire the security before the product is sent to the contractor who is yet to be known.

Other example could be the IBM Food Trust platform which is used for the food tracking. With the use of the GS1 standard and the blockchain it allows the full access to every part of food production and all of the sides engaged in the products’ lifetime, beginning with the producers, through the transporters and ending on the consumers.

Do you think that besides the IBM there exists the projects that are worth paying attention towards?

Undoubtedly, the worlds bigger than the IBM after all. One could mention the efforts of companies such as R3 or Consensys, which carry out very interesting projects in the areas of the financial sector. It is worth mentioning that despite the huge element of competitivity in this sector, both of those companies are a part of the Hyperledger community and conjointly carry out many operations. It is worth mentioning that in Poland, Alior Bank has implemented the “durable medium” which it based on the blockchain platform of the public Ethereum. PKO Bank Polski also incubates many ideas which could be implemented with the usage of blockchain as a part of cooperation with the Lets Fintech start-ups. Many of the practical ideas with the usage of blockchain are contemplated as part of the blockchain working group in the Ministry of Digitalisation or the Polish Informatics and Telecommunication Association. Year 2020 will bring us many more example of the usage of blockchain in the public use. The preview of such a trend was presented in the news published during the ImpactCEE 2019 conference, where the members of Polish KIR and UKNF informed about the creation of the open source technological blockchain sandbox which is going to allow the companies and the start-ups to create the business solutions and the acceleration of the ideas based on this technology.

How would you rate the Hyperledger environment and its organisation?

I think that as an organisation it is doing very well. It’s an extremely dynamic open source based  community, which engages in blockchain. In my opinion its trying to be the most neutral one of its kind. But most importantly its keen on the business. Every project undertaken by Hyperledger is based on the Apache 2.0 licence, which allows for almost limitless usage of the code for the commercial usage. It is very important for the companies which do not only base their value on services or products, but also on creating new components, modules to existing solutions, which remain their intellectual property. 

Overall, Hyperledger operates like every open source organisation, which seeks solutions for specified business cases, but not the other way round – expects that the business is going to adapt to it. Most of its members are companies which both develop their projects and are their main consumers. Each and every one of the projects prepared by Hyperledger must undertake a rigorous process of acceptance, which verifies that the implementing team is going to complete the project and assures that after its completion is going to find the support and look for the sponsors.

About the community, how does IBM support the start-ups?

We have many different programmes of cooperation. Most importantly the ones concerning our usage of our cloud storage. It usually allows the start-ups to gain some credits, which allow them the consumption of the calculating resources on the IBM Cloud. We also carry out different, non-standard methods of cooperation. Depending on the project, its business character, the cooperation can take many forms. Its usually the partnership where the given start-up brings a component of a more complex solution, which is highly significant from the perspective of the business. Then, IBM can see the sense in creating an added value. I guess we can say that we cooperate with the startups and help them develop using our own resources, knowledge and our contact network from many different domains.

At which stage of developing the blockchain technology is Poland?

First of all, we must differentiate two things – most importantly what are the basic examples of the usage of blockchain. First are, of course, the cryptocurrencies and investment products, and on the second one blockchain as a communication protocol in a untrustworthy environment made from many parties. On one hand our market already knows how the administration can handle the requests about the approval of existence of products, but on the other, the usage of blockchain in solving the business problems is yet to be unseen from the judicial perspective. Its kind of a good sign for me, as I believe that the less regulations exist, the easier it is to implement the technologies on your own.

In one of your articles you deducted that 2019 shall be the year of the settlement of the bills, retreat of the investors. In your mind the institutional investors were supposed to slowly shy away from the modern technologies. You said they would choose more traditional ways of investments rather than implementing the unconventional projects with blockchain and start-ups. They would follow a more stable, familiar way. The end of 2019 draws near, has your prediction come true? If yes, then what are the consequences it brings into the markets?

Yes, it did come true. As a result, now we are more aware of the problems we may be facing. The hype is simply gone. In my opinion we can wholeheartedly agree that nobody will invest his money only when hearing the word #blockchain written on the prospect or the documentation. The overreliance on the hype has lead many companies to failure in the test of time.  If they won’t try to develop more constructive value and products/services they will simply cease to exist.

What was the reason for the overwhelming hype concerning the blockchain?

Blockchain is a young technology, it has a little over 10 years and the market might still not be mature enough to embrace it. We are facing the same period that the internet was at its infancy. A great technology just awaits to be introduced at the right moment. Long years will pass until we reach the moment when the blockchain will be welcomed by the mainstream. However, one day it will be our bread and butter in the technological foundation of the modern processes. I wish for such a future to You and all of our readers.


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Applying Game Theory in Token Design

Kajetan Olas

16 Apr 2024
Applying Game Theory in Token Design

Blockchain technology allows for aligning incentives among network participants by rewarding desired behaviors with tokens.
But there is more to it than simply fostering cooperation. Game theory allows for designing incentive-machines that can't be turned-off and resemble artificial life.

Emergent Optimization

Game theory provides a robust framework for analyzing strategic interactions with mathematical models, which is particularly useful in blockchain environments where multiple stakeholders interact within a set of predefined rules. By applying this framework to token systems, developers can design systems that influence the emergent behaviors of network participants. This ensures the stability and effectiveness of the ecosystem.

Bonding Curves

Bonding curves are tool used in token design to manage the relationship between price and token supply predictably. Essentially, a bonding curve is a mathematical curve that defines the price of a token based on its supply. The more tokens that are bought, the higher the price climbs, and vice versa. This model incentivizes early adoption and can help stabilize a token’s economy over time.

For example, a bonding curve could be designed to slow down price increases after certain milestones are reached, thus preventing speculative bubbles and encouraging steadier, more organic growth.

The Case of Bitcoin

Bitcoin’s design incorporates game theory, most notably through its consensus mechanism of proof-of-work (PoW). Its reward function optimizes for security (hashrate) by optimizing for maximum electricity usage. Therefore, optimizing for its legitimate goal of being secure also inadvertently optimizes for corrupting natural environment. Another emergent outcome of PoW is the creation of mining pools, that increase centralization.

The Paperclip Maximizer and the dangers of blockchain economy

What’s the connection between AI from the story and decentralized economies? Blockchain-based incentive systems also can’t be turned off. This means that if we design an incentive system that optimizes towards a wrong objective, we might be unable to change it. Bitcoin critics argue that the PoW consensus mechanism optimizes toward destroying planet Earth.

Layer 2 Solutions

Layer 2 solutions are built on the understanding that the security provided by this core kernel of certainty can be used as an anchor. This anchor then supports additional economic mechanisms that operate off the blockchain, extending the utility of public blockchains like Ethereum. These mechanisms include state channels, sidechains, or plasma, each offering a way to conduct transactions off-chain while still being able to refer back to the anchored security of the main chain if necessary.

Conceptual Example of State Channels

State channels allow participants to perform numerous transactions off-chain, with the blockchain serving as a backstop in case of disputes or malfeasance.

Consider two players, Alice and Bob, who want to play a game of tic-tac-toe with stakes in Ethereum. The naive approach would be to interact directly with a smart contract for every move, which would be slow and costly. Instead, they can use a state channel for their game.

  1. Opening the Channel: They start by deploying a "Judge" smart contract on Ethereum, which holds the 1 ETH wager. The contract knows the rules of the game and the identities of the players.
  2. Playing the Game: Alice and Bob play the game off-chain by signing each move as transactions, which are exchanged directly between them but not broadcast to the blockchain. Each transaction includes a nonce to ensure moves are kept in order.
  3. Closing the Channel: When the game ends, the final state (i.e., the sequence of moves) is sent to the Judge contract, which pays out the wager to the winner after confirming both parties agree on the outcome.

A threat stronger than the execution

If Bob tries to cheat by submitting an old state where he was winning, Alice can challenge this during a dispute period by submitting a newer signed state. The Judge contract can verify the authenticity and order of these states due to the nonces, ensuring the integrity of the game. Thus, the mere threat of execution (submitting the state to the blockchain and having the fraud exposed) secures the off-chain interactions.

Game Theory in Practice

Understanding the application of game theory within blockchain and token ecosystems requires a structured approach to analyzing how stakeholders interact, defining possible actions they can take, and understanding the causal relationships within the system. This structured analysis helps in creating effective strategies that ensure the system operates as intended.

Stakeholder Analysis

Identifying Stakeholders

The first step in applying game theory effectively is identifying all relevant stakeholders within the ecosystem. This includes direct participants such as users, miners, and developers but also external entities like regulators, potential attackers, and partner organizations. Understanding who the stakeholders are and what their interests and capabilities are is crucial for predicting how they might interact within the system.

Stakeholders in blockchain development for systems engineering

Assessing Incentives and Capabilities

Each stakeholder has different motivations and resources at their disposal. For instance, miners are motivated by block rewards and transaction fees, while users seek fast, secure, and cheap transactions. Clearly defining these incentives helps in predicting how changes to the system’s rules and parameters might influence their behaviors.

Defining Action Space

Possible Actions

The action space encompasses all possible decisions or strategies stakeholders can employ in response to the ecosystem's dynamics. For example, a miner might choose to increase computational power, a user might decide to hold or sell tokens, and a developer might propose changes to the protocol.

Artonomus, Github

Constraints and Opportunities

Understanding the constraints (such as economic costs, technological limitations, and regulatory frameworks) and opportunities (such as new technological advancements or changes in market demand) within which these actions take place is vital. This helps in modeling potential strategies stakeholders might adopt.

Artonomus, Github

Causal Relationships Diagram

Mapping Interactions

Creating a diagram that represents the causal relationships between different actions and outcomes within the ecosystem can illuminate how complex interactions unfold. This diagram helps in identifying which variables influence others and how they do so, making it easier to predict the outcomes of certain actions.

Artonomus, Github

Analyzing Impact

By examining the causal relationships, developers and system designers can identify critical leverage points where small changes could have significant impacts. This analysis is crucial for enhancing system stability and ensuring its efficiency.

Feedback Loops

Understanding feedback loops within a blockchain ecosystem is critical as they can significantly amplify or mitigate the effects of changes within the system. These loops can reinforce or counteract trends, leading to rapid growth or decline.

Reinforcing Loops

Reinforcing loops are feedback mechanisms that amplify the effects of a trend or action. For example, increased adoption of a blockchain platform can lead to more developers creating applications on it, which in turn leads to further adoption. This positive feedback loop can drive rapid growth and success.

Death Spiral

Conversely, a death spiral is a type of reinforcing loop that leads to negative outcomes. An example might be the increasing cost of transaction fees leading to decreased usage of the blockchain, which reduces the incentive for miners to secure the network, further decreasing system performance and user adoption. Identifying potential death spirals early is crucial for maintaining the ecosystem's health.

The Death Spiral: How Terra's Algorithmic Stablecoin Came Crashing Down
the-death-spiral-how-terras-algorithmic-stablecoin-came-crashing-down/, Forbes


The fundamental advantage of token-based systems is being able to reward desired behavior. To capitalize on that possibility, token engineers put careful attention into optimization and designing incentives for long-term growth.


  1. What does game theory contribute to blockchain token design?
    • Game theory optimizes blockchain ecosystems by structuring incentives that reward desired behavior.
  2. How do bonding curves apply game theory to improve token economics?
    • Bonding curves set token pricing that adjusts with supply changes, strategically incentivizing early purchases and penalizing speculation.
  3. What benefits do Layer 2 solutions provide in the context of game theory?
    • Layer 2 solutions leverage game theory, by creating systems where the threat of reporting fraudulent behavior ensures honest participation.

Token Engineering Process

Kajetan Olas

13 Apr 2024
Token Engineering Process

Token Engineering is an emerging field that addresses the systematic design and engineering of blockchain-based tokens. It applies rigorous mathematical methods from the Complex Systems Engineering discipline to tokenomics design.

In this article, we will walk through the Token Engineering Process and break it down into three key stages. Discovery Phase, Design Phase, and Deployment Phase.

Discovery Phase of Token Engineering Process

The first stage of the token engineering process is the Discovery Phase. It focuses on constructing high-level business plans, defining objectives, and identifying problems to be solved. That phase is also the time when token engineers first define key stakeholders in the project.

Defining the Problem

This may seem counterintuitive. Why would we start with the problem when designing tokenomics? Shouldn’t we start with more down-to-earth matters like token supply? The answer is No. Tokens are a medium for creating and exchanging value within a project’s ecosystem. Since crypto projects draw their value from solving problems that can’t be solved through TradFi mechanisms, their tokenomics should reflect that. 

The industry standard, developed by McKinsey & Co. and adapted to token engineering purposes by Outlier Ventures, is structuring the problem through a logic tree, following MECE.
MECE stands for Mutually Exclusive, Collectively Exhaustive. Mutually Exclusive means that problems in the tree should not overlap. Collectively Exhaustive means that the tree should cover all issues.

In practice, the “Problem” should be replaced by a whole problem statement worksheet. The same will hold for some of the boxes.
A commonly used tool for designing these kinds of diagrams is the Miro whiteboard.

Identifying Stakeholders and Value Flows in Token Engineering

This part is about identifying all relevant actors in the ecosystem and how value flows between them. To illustrate what we mean let’s consider an example of NFT marketplace. In its case, relevant actors might be sellers, buyers, NFT creators, and a marketplace owner. Possible value flow when conducting a transaction might be: buyer gets rid of his tokens, seller gets some of them, marketplace owner gets some of them as fees, and NFT creators get some of them as royalties.

Incentive Mechanisms Canvas

The last part of what we consider to be in the Discovery Phase is filling the Incentive Mechanisms Canvas. After successfully identifying value flows in the previous stage, token engineers search for frictions to desired behaviors and point out the undesired behaviors. For example, friction to activity on an NFT marketplace might be respecting royalty fees by marketplace owners since it reduces value flowing to the seller.


Design Phase of Token Engineering Process

The second stage of the Token Engineering Process is the Design Phase in which you make use of high-level descriptions from the previous step to come up with a specific design of the project. This will include everything that can be usually found in crypto whitepapers (e.g. governance mechanisms, incentive mechanisms, token supply, etc). After finishing the design, token engineers should represent the whole value flow and transactional logic on detailed visual diagrams. These diagrams will be a basis for creating mathematical models in the Deployment Phase. 

Token Engineering Artonomous Design Diagram
Artonomous design diagram, source: Artonomous GitHub

Objective Function

Every crypto project has some objective. The objective can consist of many goals, such as decentralization or token price. The objective function is a mathematical function assigning weights to different factors that influence the main objective in the order of their importance. This function will be a reference for machine learning algorithms in the next steps. They will try to find quantitative parameters (e.g. network fees) that maximize the output of this function.
Modified Metcalfe’s Law can serve as an inspiration during that step. It’s a framework for valuing crypto projects, but we believe that after adjustments it can also be used in this context.

Deployment Phase of Token Engineering Process

The Deployment Phase is final, but also the most demanding step in the process. It involves the implementation of machine learning algorithms that test our assumptions and optimize quantitative parameters. Token Engineering draws from Nassim Taleb’s concept of Antifragility and extensively uses feedback loops to make a system that gains from arising shocks.

Agent-based Modelling 

In agent-based modeling, we describe a set of behaviors and goals displayed by each agent participating in the system (this is why previous steps focused so much on describing stakeholders). Each agent is controlled by an autonomous AI and continuously optimizes his strategy. He learns from his experience and can mimic the behavior of other agents if he finds it effective (Reinforced Learning). This approach allows for mimicking real users, who adapt their strategies with time. An example adaptive agent would be a cryptocurrency trader, who changes his trading strategy in response to experiencing a loss of money.

Monte Carlo Simulations

Token Engineers use the Monte Carlo method to simulate the consequences of various possible interactions while taking into account the probability of their occurrence. By running a large number of simulations it’s possible to stress-test the project in multiple scenarios and identify emergent risks.

Testnet Deployment

If possible, it's highly beneficial for projects to extend the testing phase even further by letting real users use the network. Idea is the same as in agent-based testing - continuous optimization based on provided metrics. Furthermore, in case the project considers airdropping its tokens, giving them to early users is a great strategy. Even though part of the activity will be disingenuine and airdrop-oriented, such strategy still works better than most.

Time Duration

Token engineering process may take from as little as 2 weeks to as much as 5 months. It depends on the project category (Layer 1 protocol will require more time, than a simple DApp), and security requirements. For example, a bank issuing its digital token will have a very low risk tolerance.

Required Skills for Token Engineering

Token engineering is a multidisciplinary field and requires a great amount of specialized knowledge. Key knowledge areas are:

  • Systems Engineering
  • Machine Learning
  • Market Research
  • Capital Markets
  • Current trends in Web3
  • Blockchain Engineering
  • Statistics


The token engineering process consists of 3 steps: Discovery Phase, Design Phase, and Deployment Phase. It’s utilized mostly by established blockchain projects, and financial institutions like the International Monetary Fund. Even though it’s a very resource-consuming process, we believe it’s worth it. Projects that went through scrupulous design and testing before launch are much more likely to receive VC funding and be in the 10% of crypto projects that survive the bear market. Going through that process also has a symbolic meaning - it shows that the project is long-term oriented.

If you're looking to create a robust tokenomics model and go through institutional-grade testing please reach out to Our team is ready to help you with the token engineering process and ensure your project’s resilience in the long term.


What does token engineering process look like?

  • Token engineering process is conducted in a 3-step methodical fashion. This includes Discovery Phase, Design Phase, and Deployment Phase. Each of these stages should be tailored to the specific needs of a project.

Is token engineering meant only for big projects?

  • We recommend that even small projects go through a simplified design and optimization process. This increases community's trust and makes sure that the tokenomics doesn't have any obvious flaws.

How long does the token engineering process take?

  • It depends on the project and may range from 2 weeks to 5 months.