NFTs are special types of tokens that reside on a distributed ledger and hold a digital asset, such as a document, picture or movie. There has recently been an explosion in their popularity, most notably in sports, art and music. We explore their key characteristics…

The traditional way of funding early-stage startups is through Venture Capital. Decentralised projects have experimented with innovative ways of raising funding by issuing security and utility tokens. We compare the different approaches and analyse how tokens can align the incentives of customers, founders and investors….

Can Bitcoin or other cryptocurrencies serve as a store of value? We discuss the economic rationale behind this basic function of money and under which conditions it can be fulfilled. While it does show that something intrinsically worthless can rationally be used to store value,…

Decentralised Finance (DeFi) replicates many of the functions of the traditional financial system. It has seen tremendous growth over the last year, making it one of the most important applications of Distributed Ledger Technology (DLT). Is DeFi indeed a “digital” version of traditional finance, or…

Digital securities are traded within a distributed ledger but represent assets that exist in the real world. In this post, we examine whether they can disrupt financial markets by offering a more efficient way of processing trades. Introduction A digital security, also known as a…

How should blockchains be governed? Distributed Ledger Technology allows us to experiment with new voting algorithms that are embedded on the blockchain and free from human intervention. In this note, we examine the differences between on-chain and off-chain governance and discuss specific forms that have…

The issuance of native tokens within a platform, such as a distributed ledger, is one of the most common ways of financing its maintenance and development. In this note, we discuss how a platform economy works, whether a fixed supply of tokens is optimal and…

Part of a thought-leadership series by Aaro Capital The Bitcoin network is maintained by miners, who keep a copy of all previous blocks of transactions and compete to write new blocks, in order to earn transaction fees and newly created coins. In this report, we…