The Avalanche Foundation has announced the selection of six research teams for its inaugural Call for Research Proposals. These teams will focus on two critical areas in blockchain economics: cryptoasset pricing and valuation, and validator economics and network security. Over the next year, their findings are expected to directly inform the development and governance of the Avalanche network.

Selection Process and Committee

The selection process began with over 175 submissions, of which approximately 90 advanced to full committee review. The final six proposals were chosen based on criteria such as relevance, methodological rigor, novelty, feasibility, and team qualifications. The independent selection committee included notable figures such as Emin Gün Sirer, CEO of Ava Labs; Matias A., Chief Investment Officer of the Avalanche Foundation; and academics like Campbell Harvey of Duke University and Agostino Capponi of Columbia University. Each member reviewed submissions independently, ensuring a transparent and unbiased process.

Research Areas and Selected Proposals

The selected proposals span two main research areas:

Cryptoasset Pricing and Valuation

  • "Financial Application Value Accrual in Layer-1 Blockchain Economies" by Ruizhe Jia (Stanford University) and team. This project examines how value generated by applications on Layer 1 blockchains, such as trading fees, contributes to the broader ecosystem.
  • "Staking, Token Valuation, and Platform Evolution" by Lin William Cong (Nanyang Technological University) and collaborators. This research models staking as a feedback loop between liquidity, network security, and platform productivity, offering insights into the transition from token-based to fee-based rewards.

Validator Economics and Network Security

  • "The Macroeconomics of Decentralisation in Proof-of-Stake Blockchains" by Fayçal Drissi (University of Oxford) and team. This project models proof-of-stake networks as small open economies, analyzing the trade-offs between inflation-based and fee-based reward systems.
  • "From Inflationary Rewards to Fee-Based Security" by Lin William Cong (Nanyang Technological University) and team. Using Avalanche network data, this study evaluates how fee structures under ACP-77 could sustain validator incentives as token issuance declines.

Academic Excellence and Practical Impact

The grantees include researchers from institutions such as Stanford University, the University of Oxford, and Nanyang Technological University, with doctorates from leading universities like MIT and Princeton. Each proposal was selected for its potential to deliver actionable insights, aligning with the Avalanche Foundation’s goal of advancing blockchain economics research.

Matias A., Chief Investment Officer at the Avalanche Foundation, emphasized the significance of the program: "Bringing in researchers of this calibre means we can tackle the hardest open questions in blockchain economics faster. I’m looking forward to working with them, and to putting their findings to work on Avalanche."