A Dynamic Model for Token-gated Clubs

Abstract

Token-gated clubs are communities accessible exclusively to token holders. We develop a dynamic model to capture the evolution of these clubs, where members share resources and resource capacity expands through network effects. In our model, members vary by intrinsic valuations, and each new member’s entry shifts the club’s state and token price, leading existing members to reassess their participation. We demonstrate how the initial token launch mechanism influences club growth and reveal that speculators, or low-valuation members, can benefit the club by enhancing early-stage externalities that support high-valuation members. Compared to subscription-based clubs, token-gated clubs may experience faster growth and improved social welfare through the involvement of speculators. 

Keywords: Blockchain, cryptocurrency, token gating, club goods, stochastic game