defi-research

Started to read this book by Rafael Pass. Just getting through the first chapter already a combination of deep and intensive mathematical relationship but equally easy to digest concept about networks and their tie to game theory/mechanism.  Would be interested in chatting with other who have read similar titles/topics

Spent a decent amount of time skimming through the first chapters of this book. I feel like a lot of people in the defi space want to try to apply Game Theory to mechanism design, but I caution this since the entire point Nash was proving mixed game equilibrium in finite games.

The key point is crypto is continuous, and open in a sense that your utility that you designed within your own protocol is *not* what rational users are using.

This was the entire failure of OHM and the (3, 3) strategy as people defected, since they believed their expected utility by just leaving was higher than 3.

On the Nash Mixed games point, he proved that optimal strategies exist for expected utility where people act randomly, but that was in finite games with finite outcome space. Crypto is continuous and has a probability distribution across the continuous space.

At that point you might as well resort to Gibb's sampling proofs. I could be wrong and what do I know, but I just keep seeing Game Theory trying to apply to financial swaps, and I don't think the people (those (3,3) designers) actually know game theory models don't apply here.