1/ #Fomo3d is a variant on a well-studied game theory problem called "entrapment".
This is just the start of "Game Theory As A Dark Art."
Here's what we can learn from it 👇
This is just the start of "Game Theory As A Dark Art."
Here's what we can learn from it 👇
2/ A popular entrapment game is an "all-pay auction" (where each bid costs money). This is similar to FOMO3D where you need to pay each time you "take" the private key.
Max Bazerman (a professor at Harvard) has run all-pay auctions for $20 bills with his class. Results 👇
Max Bazerman (a professor at Harvard) has run all-pay auctions for $20 bills with his class. Results 👇
3/ It's logical to pay $1 for $20.
Then to pay $19 for $20.
But it even makes sense to pay $21 for $20, because then you only lose $1 (21-20) instead of losing the amount of your previous bid (and not winning the $20).
Then to pay $19 for $20.
But it even makes sense to pay $21 for $20, because then you only lose $1 (21-20) instead of losing the amount of your previous bid (and not winning the $20).
4/ At this point it turns into a two-player game with no "rational" stopping point.
The other player rationally pays $22 for $20. You rationally pay $23 for $20 (losing $3 better than losing $21). Repeat...forever?
In reality, here's what happens 👇
The other player rationally pays $22 for $20. You rationally pay $23 for $20 (losing $3 better than losing $21). Repeat...forever?
In reality, here's what happens 👇
4/ Bazerman has run ~200 such auctions (which are a slight variant with just the top 2 bids paying).
He's never made less than $39. Seven have made him more than $100 ($50 from both players) and his highest take was $407 (over $200 from both players).
He's made $17,000 total.
He's never made less than $39. Seven have made him more than $100 ($50 from both players) and his highest take was $407 (over $200 from both players).
He's made $17,000 total.
5/ So...FOMO3D? When will it end?
In the $20 auctions, students payed ~5x the "prize pool" (to lose less).
The price for a FOMO3D key right now is .005 for a 21691 ETH pot.
Roughly speaking, we'd expect keys to need to cost ~5x the pot (~100k+ ETH) for the auction to end.
In the $20 auctions, students payed ~5x the "prize pool" (to lose less).
The price for a FOMO3D key right now is .005 for a 21691 ETH pot.
Roughly speaking, we'd expect keys to need to cost ~5x the pot (~100k+ ETH) for the auction to end.
6/ I don't know the bonding curve for key prices, but...this could be a while.
Especially because they have a complicated mechanism where you make money from other key buying, airdrops, teams, PoWH actions, etc.
Programmatic money ftw? 😂
Especially because they have a complicated mechanism where you make money from other key buying, airdrops, teams, PoWH actions, etc.
Programmatic money ftw? 😂
7/ We should expect this to be just the start of "game theory exploitation". @slatestarcodex calls this "Game Theory As A Dark Art" and says:
"One of the most charming features of game theory is the almost limitless depths of evil to which it can sink."
"One of the most charming features of game theory is the almost limitless depths of evil to which it can sink."
8/ These examples exist outside of crypto as well. See this hilarious video for @DealDash:
dealdash.com/help/how-it-wo…
dealdash.com/help/how-it-wo…
9/ If you'd like to learn more (or want to do different kinds of Game Theory Dark Arts!), see this @slatestarcodex article.
cc'ing folks who I think would enjoy this thread @PoWH3D @simondlr, @trentmc0, @yanroux, @stefanobernardi, @delitzer, @Iiterature
lesswrong.com/posts/A2Qam9Bd…
cc'ing folks who I think would enjoy this thread @PoWH3D @simondlr, @trentmc0, @yanroux, @stefanobernardi, @delitzer, @Iiterature
lesswrong.com/posts/A2Qam9Bd…
