Token Economics Framework

17 Pages Posted: 29 May 2019

See all articles by Lisa Tan

Lisa Tan

Economics Design Limited

Date Written: Apr 8, 2019

Abstract

Matching economic theories, the paper discusses the underlying fundamentals of token economics that exist within a token ecosystem. 3 design fundamentals that affect the soundness of token economics: 1) Market Design, 2) Mechanism Design and, 3) Token Design. Token ecosystems facilitate an exchange of goods and services between participants in the ecosystem. Concepts from matching theory, auction theory, monetary economics, allocation theory, network economics and game theory, can help better design strong incentives for participants, produce robust stable outcomes, reduce inefficient allocation and improve the efficiency of transaction within the ecosystem. This challenges existing systems that will open powerful potential for long-term sustainability of token ecosystems and overcoming existing challenges.

Keywords: Token Economics, Market Design, Mechanism Design, Token Design, Allocation Theory, Network Economics, Blockchain Economics

JEL Classification: O31, 033, 039, Y20

Suggested Citation

Tan, Lisa, Token Economics Framework (Apr 8, 2019). Available at SSRN: https://ssrn.com/abstract=3381452 or http://dx.doi.org/10.2139/ssrn.3381452

Lisa Tan (Contact Author)

Economics Design Limited ( email )

Singapore

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