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Daniel Kirste

Publications and source records attributed to Daniel Kirste.

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Benchmarking is Broken -- Don't Let AI be its Own Judge

The meteoric rise of AI, with its rapidly expanding market capitalization, presents both transformative opportunities and critical challenges. Chief among these is the urgent need for a new, unified paradigm for trustworthy evaluation, as current benchmarks increasingly reveal critical vulnerabilities. Issues like data contamination and selective reporting by model developers fuel hype, while inadequate data quality control can lead to biased evaluations that, even if unintentionally, may favor specific approaches. As a flood of participants enters the AI space, this "Wild West" of assessment makes distinguishing genuine progress from exaggerated claims exceptionally difficult. Such ambiguity blurs scientific signals and erodes public confidence, much as unchecked claims would destabilize financial markets reliant on credible oversight from agencies like Moody's. In high-stakes human examinations (e.g., SAT, GRE), substantial effort is devoted to ensuring fairness and credibility; why settle for less in evaluating AI, especially given its profound societal impact? This position paper argues that the current laissez-faire approach is unsustainable. We contend that true, sustainable AI advancement demands a paradigm shift: a unified, live, and quality-controlled benchmarking framework robust by construction, not by mere courtesy and goodwill. To this end, we dissect the systemic flaws undermining today's AI evaluation, distill the essential requirements for a new generation of assessments, and introduce PeerBench (with its prototype implementation at https://www.peerbench.ai/), a community-governed, proctored evaluation blueprint that embodies this paradigm through sealed execution, item banking with rolling renewal, and delayed transparency. Our goal is to pave the way for evaluations that can restore integrity and deliver genuinely trustworthy measures of AI progress.

cs.AI

Automated Market Makers: A Stochastic Optimization Approach for Profitable Liquidity Concentration

Concentrated liquidity automated market makers (AMMs), such as Uniswap v3, enable liquidity providers (LPs) to earn liquidity rewards by depositing tokens into liquidity pools. However, LPs often face significant financial losses driven by poorly selected liquidity provision intervals and high costs associated with frequent liquidity reallocation. To support LPs in achieving more profitable liquidity concentration, we developed a tractable stochastic optimization problem that can be used to compute optimal liquidity provision intervals for profitable liquidity provision. The developed problem accounts for the relationships between liquidity rewards, divergence loss, and reallocation costs. By formalizing optimal liquidity provision as a tractable stochastic optimization problem, we support a better understanding of the relationship between liquidity rewards, divergence loss, and reallocation costs. Moreover, the stochastic optimization problem offers a foundation for more profitable liquidity concentration.

q-fin.TR

Automated Market Makers in Cryptoeconomic Systems: A Taxonomy and Archetypes

Designing automated market makers (AMMs) is crucial for decentralized token exchanges in cryptoeconomic systems. At the intersection of software engineering and economics, AMM design is complex and, if done incorrectly, can lead to financial risks and inefficiencies. We developed an AMM taxonomy for systematically comparing AMM designs and propose three AMM archetypes that meet key requirements for token issuance and exchange. This work bridges software engineering and economic perspectives, providing insights to help developers design AMMs tailored to diverse use cases and foster sustainable cryptoeconomic systems.

q-fin.TR

Automated Market Makers: Toward More Profitable Liquidity Provisioning Strategies

To trade tokens in cryptoeconomic systems, automated market makers (AMMs) typically rely on liquidity providers (LPs) that deposit tokens in exchange for rewards. To profit from such rewards, LPs must use effective liquidity provisioning strategies. However, LPs lack guidance for developing such strategies, which often leads them to financial losses. We developed a measurement model based on impermanent loss to analyze the influences of key parameters (i.e., liquidity pool type, position duration, position range size, and position size) of liquidity provisioning strategies on LPs' returns. To reveal the influences of those key parameters on LPs' profits, we used the measurement model to analyze 700 days of historical liquidity provision data of Uniswap v3. By uncovering the influences of key parameters of liquidity provisioning strategies on profitability, this work supports LPs in developing more profitable strategies.

q-fin.TR

Efficiency in Digital Economies -- A Primer on Tokenomics

Cryptographic tokens are a new digital paradigm that can facilitate the establishment of economic incentives in digital ecoystems. Tokens can be leveraged for the coordination, optimization and governance of large networks at scale in a decentralized manner. A key aspect is their programmability, that can reward participants relative to their stage of adoption, according to the value they contribute and the risk they bear. Moreover, this can be done in a transparent and verifiable way, which increases trustworthiness in the emerging systems. This work presents an overview of this new phenomenon and to provide multi-disciplinary arguments on why tokenized ecosystems can drive a huge momentum for positive-sum collaboration in the digital age. We illustrate how certain principles and values that arise from the evolutionary process of digital cooperation can lead to a market economy characterized by economic efficiency of both individuals and the tokenized ecosystem as a whole.

cs.CY