Three Case Studies in Tokenomics

Abstract

Blockchain technology has facilitated the creation of artificial economies based on tokens and cryptocurrencies. These artificial economies are different from real economies in many aspects. They are more narrowly focused around the provisioning of only a few (sometimes only one) goods or services. They can be more flexible, as blockchain technology allows the development of smart contracts to control the issuance or burning of tokens under any arbitrary conditions. Also, there are other types of exogenous risks, such as new kinds of regulations, and speculative or hacking attacks on exchanges. This means, that many of the tools, theories and methods that apply in economics do not apply in the case of token economies. The tokenomist needs to sometimes come up with new models and tools for each individual case. Since tokenomics is a new field, the open discussion around tools and methods is extremely important, and can speed up the development of methods that will later turn into standard practices. This article outlines three different case studies around tokenomics and discusses how the challenges of each case were approached.