TY  - BOOK
AU  - Cong,Lin William
AU  - Tang,Ke
AU  - Wang,Yanxin
AU  - Zhao,Xi
ED  - National Bureau of Economic Research.
TI  - Inclusion and Democratization Through Web3 and DeFi? Initial Evidence from the Ethereum Ecosystem
T2  - NBER working paper series
PY  - 2023///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
KW  - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
KW  - jelc
KW  - General
KW  - Other
KW  - Externalities • Redistributive Effects • Environmental Taxes and Subsidies
KW  - Transactional Relationships • Contracts and Reputation • Networks
N1  - February 2023; Hardcopy version available to institutional subscribers
N2  - Web3 and DeFi are widely advocated as innovations for greater financial inclusion and democratization. We assemble the most comprehensive dataset to date on the largest Web3 ecosystem and use large-scale computing to conduct an initial investigation. We describe Ethereum's network structure, time trends, and distributions of transactions, mining, and ownership. Mining income and Ether ownership are concentrated in exchanges and a few individual nodes. Network activities evolve from peer-to-peer to user-DApps/DeFi interactions, with significantly more transactions by large players. Moreover, high percentage transaction fees, congestion-induced fluctuation of gas prices, suboptimal reserve setting, and large return volatility of tokens present particular challenges for small, poor, unsophisticated, and new nodes, not to mention that the high failure rates hurt all users. Finally, we present suggestive causal evidence that base-fee burning mechanisms (e.g., EIP-1559) and airdrop programs (e.g., OmiseGo Airdrop) facilitate inclusion through token monetary redistribution
UR  - https://www.nber.org/papers/w30949
UR  - http://dx.doi.org/10.3386/w30949
ER  -