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+# Energy Anchoring in Blockchain Networks: Implications for Polkadot's NPoS System
+
+## Project Description
+
+This research project quantifies the relationship between energy expenditure and market stability across different consensus mechanisms, with specific focus on Nominated Proof-of-Stake (NPoS) systems like Polkadot. Using our empirically validated Cumulative Energy Investment Ratio (CEIR) methodology, we will analyze how Polkadot's validator economics compare to other networks and provide a framework for measuring sustainability benefits.
+
+### Background and Problem Statement
+
+Blockchain networks have faced significant criticism regarding energy consumption, yet little empirical research exists quantifying how energy expenditure affects market stability across different consensus mechanisms. Our research has documented that Ethereum's transition to Proof-of-Stake resulted in a 28.7 percentage point reduction in volatility, suggesting that energy economics fundamentally impact blockchain market dynamics.
+
+This research will address three critical questions for the Polkadot ecosystem:
+
+1. How does Polkadot's NPoS mechanism compare to other consensus systems in terms of energy efficiency?
+2. What specific features of Polkadot's validator selection optimize the trade-off between energy use and market stability?
+3. How can parachain teams leverage these findings to design more stable token economics?
+
+### Project Details
+
+Our research employs a quasi-experimental approach using natural experiments:
+
+1. **Ethereum's Proof-of-Stake Transition**: Using difference-in-differences to isolate the causal effect of removing energy costs on market volatility (showing a 28.7pp reduction).
+
+2. **Bitcoin's China Mining Ban**: Analysis of volatility changes when mining was redistributed globally (showing a 12.9pp change).
+
+3. **Application to Polkadot's NPoS**: Extending this methodology to analyze Polkadot's validator economics and parachain auctions.
+
+Our Cumulative Energy Investment Ratio (CEIR) provides a unifying metric that measures market capitalization relative to historical energy expenditure, allowing for cross-chain comparisons.
+
+### Technology Stack
+
+- Research methodology: Time series econometrics, natural experiment design
+- Implementation: Python (pandas, statsmodels), R (for robustness checks)
+- Data sources: On-chain metrics, Cambridge Bitcoin Electricity Consumption Index, validator economics data
+
+### Documentation
+
+The research findings will be documented in:
+
+1. A comprehensive research paper suitable for academic publication
+2. Open-source methodology and code
+3. Educational blog posts explaining implications for Polkadot developers and validators
+
+## Team
+
+### Team Members
+
+Christopher Ongko
+- Role: Principal Investigator
+- Master's student in Finance & Accounting at Yuan Ze University
+- GitHub: https://github.com/AutzuisDabest/energy-anchoring-metric
+
+### Team Experience
+
+The researcher has:
+- Developed the Cumulative Energy Investment Ratio (CEIR) methodology
+- Paper under review at Financial Innovation journal
+- Identified and measured a 28.7pp volatility reduction following Ethereum's Merge
+
+## Development Roadmap
+
+### Overview
+
+- **Total Estimated Duration**: 3 months
+- **Full-Time Equivalent (FTE)**: 1 FTE
+- **Total Costs**: 10,000 USD
+
+### Milestone 1: Methodology Adaptation and Data Collection
+
+- **Estimated Duration**: 1 month
+- **FTE**: 1
+- **Costs**: 3,000 USD
+
+| Number | Deliverable | Specification |
+| -----: | ----------- | ------------- |
+| 0a. | License | Apache 2.0 |
+| 0b. | Documentation | Research methodology document explaining CEIR adaptation to NPoS systems |
+| 0c. | Testing | Validation of metrics using historical data |
+| 1. | Data Collection | Compilation of Polkadot validator data and energy proxies |
+| 2. | Methodology Paper | Adaptation of CEIR methodology for NPoS systems |
+
+### Milestone 2: Comparative Analysis
+
+- **Estimated Duration**: 1 month
+- **FTE**: 1
+- **Costs**: 3,000 USD
+
+| Number | Deliverable | Specification |
+| -----: | ----------- | ------------- |
+| 0a. | License | Apache 2.0 |
+| 0b. | Documentation | Analysis methodology and preliminary findings |
+| 0c. | Testing | Statistical validation and robustness checks |
+| 1. | Comparative Analysis | Cross-chain analysis comparing PoW, PoS, and NPoS systems |
+| 2. | Polkadot-Specific Analysis | Analysis of Polkadot validator economics and energy efficiency |
+
+### Milestone 3: Final Research Paper and Documentation
+
+- **Estimated Duration**: 1 month
+- **FTE**: 1
+- **Costs**: 4,000 USD
+
+| Number | Deliverable | Specification |
+| -----: | ----------- | ------------- |
+| 0a. | License | Apache 2.0 |
+| 0b. | Documentation | Comprehensive research paper and code documentation |
+| 0c. | Testing | Peer review and validation |
+| 1. | Research Paper | Comprehensive paper on energy anchoring in NPoS systems |
+| 2. | Educational Content | Two blog posts explaining findings for Polkadot stakeholders |
+| 3. | Open-Source Code | GitHub repository with methodology and analysis code |
+
+## Future Plans
+
+### Project Maintenance
+
+The research methodology and tools will be maintained via GitHub, with updates as new data becomes available. The research paper will be submitted to an academic journal for peer review.
+
+### Ecosystem Integration
+
+This research has direct implications for:
+
+1. **Parachain teams**: Informing token economic design for optimal stability
+2. **Validators**: Understanding economic incentives and energy costs
+3. **Polkadot ecosystem**: Quantifying sustainability benefits compared to PoW systems
+
+## Additional Information
+
+### What work has been done so far?
+
+- Development of CEIR methodology
+- Empirical analysis of Ethereum's Merge showing 28.7pp volatility reduction
+- GitHub repository with initial code implementation
+- Research paper under review at Financial Innovation journal
+
+### Have you applied for other grants?
+
+Yes, an application for a similar research project focusing on Ethereum has been submitted to the Ethereum Foundation Small Grants program. This proposal for Web3 Foundation specifically focuses on Polkadot's NPoS system and validator economics, which is a distinct research direction.
+
+## Payment Method
+
+- Preferred payment method: 50% DOT / 50% USDC
+- Payment address: [To be provided upon request]