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The Plenny experiment applies the design science research methodology. This research paradigm is understood as an applied research approach with a pragmatic nature. The focus is on the practical implementation of novel blockchain concepts to create innovative decentralized applications.

The pilot serves as the artifact to discover practical solutions and acquire knowledge with the intention of improving functional performance. Artifacts refer to the development of innovative systems and the design of corresponding business processes. The main purpose of design science research is to gain knowledge and understanding of a problem area through the construction and application of a designed artifact.

Design science research is applied in the disciplines of computer science and business informatics but is not limited to these fields. In the sense of this constructive method, hermeneutic approaches were made on interdisciplinary issues where the pilot study touches on economics (i.e. monetary economics) and law. Specifically, generally known concepts from finance and law (e.g. banking and securities laws as well as anti-money laundering laws) are applied and subject to interpretation in the context of the business cases at hand.

The research approach applies extensive try-out methods that consider the constructive and hermeneutic procedures employing a combination of quantitative and qualitative techniques. For evaluation of the experiment, the findings are measured quantitatively by transaction volume. Basically, they arise in a conventional way based on the number of users and can also be measured by the token value. Moreover, the valuation methodology for tokens used is quantitative, applying the commonly accepted theory of money. Qualitative methods have been applied through the iterative development process by interviewing engineers and early adopters to extract interpretive phenomenological feedback throughout the design cycle. Feedback from initial users has been influential to the implementation of the pilot and for the generation of genuine test data.

The three cycles of design science research are recurring elements of the experiment as they are closely related activities. The relevance cycle covered the definition of the research areas, the review of available resources to put toward requirements, and acceptance criteria. At the same time, a trial-and-error approach was applied to uncover the new knowledge and evaluate interim results for further consideration. By continuously evaluating the findings and probing the implementation, as well as rigorously examining theories and testing existing practical concepts, the rigor cycle has been embedded into the procedure. The design cycle iterated between the research and testing process and the development of the artifact.

Starting from prior research, including the theoretical Proof of Concept (POC), this Working Paper outlines the practical relevant conditions for prototyping, describes the structures of the Minimum Viable Product (MVP), defines the implementation of the pilot project, and uses assumed data for initial live tests as well as initial user adoption via the decentralized web.

Following an iterative R&D approach, the experiment’s purpose is to deepen the understanding of blockchain-driven computational systems and their implications from a functional perspective. This approach aims to realize and clarify the meaning of user experiences when building decentralized applications for cryptographic means of payment. As the experiment advances, the pilot might adapt other research methodologies to study the LN in order to gain insights for the ongoing development of Plenny.

It is worth noting that neither Bitcoin nor Ethereum emerged from academic research, but rather from the practical development of applications through opensource communities. Beyond trading crypto, research gaps in crypto technology are mainly uncovered by independent groups of engineers working in small business environments outside of universities. Research, innovation, and field experiments in decentralized applications utilizing blockchains and smart contracts are mostly non-institutional.

The search for new knowledge in this field takes place in international open-source communities, which are often composed of software engineers from emerging economies. These unconventional researchers are driven by their pursuit of better economic conditions to overcome the restrictions on freedom caused by monetary policy and regulatory systems in their countries. In this context, the research approach is not primarily on fulfilling academic standards and formalities, but on practical implementation of use cases to achieve economically beneficial outcomes and financial inclusion.