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Tokenomics for Crytpo Projects: Multiple Perspectives

March 23, 2023

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It was an honor being on a crypto tokenomics panel with the guys from BNB Chain, PWN and BlockBuilders, because we all had such different persectives. What often fascinates me is the tension between creating a token economic model that appeals to the investors in a project and a model that will have long-term viability for the participants in the actual project.
When token engineers talk about sustainability, what they mean is that people will continue to prop up the price of the token. Unfortunately, I think that as an industry, we still have almost no experience in understanding what real long-term value is when it comes to tokens—or even what sustainability means for a blockchain or Web3 project.
After all, a blockchain lives forever, so you could argue it’s always sustainable. Namecoin is the perfect example. You still hear people using it as an example of a successful project, because it still exists, but it’s rare even for Bitcoin maxis to use a Namecoin address. ENS, on the other hand, is in day-to-day use by almost everyone I know who’s active in the Web3 community.
Myself, two Joes and Adam discussed different aspects of. tokenomics, but I really couldn’t help but wonder: if people join a community mainly for the financial benefits, how do you transition them over when the project needs them to take part in the day-to-day activities?
And if you are paying people to bring in friends, retweet, and get people to join the Discord channel, is the project attracting people or is it just distributing airdrops? The problem leaks into DAOs. Even with NFT-based voting, which I mention in the talk, buying and selling the right to vote doesn’t seem like a reasonable long-term solution. Yes, it aligns the
interests of the people who put money into a project—but that’s not the same as the interest of the people who use a system.
Think of it this way: on the one hand, you want your investors to get a return on their investment. On the other hand, what happens if you give them the full power to vote on how much of the income goes back into their hands? If they are completely liquid and can cash out at any time, the problem is compounded.
In any case, this panel discussion has something for everyone.
Whether you are interested in attracting investors, vesting schedules that support your token prices, or maintaining value for the users of your Web3 services, this one has something for you.

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