Key Points

1. different token types for different purposes ( security, utility, loyalty incentives etc ) ( see Token Taxonomy Framework )
2. different jurisdictions have different legal definitions and regulations for different token types ( still evolving )
3. security token - has a defined claim against assets ( like stock ) and issued via ICO or secondary sale
4. utility token - used to incentivize participants on a platform, can be used to purchase goods on marketplace
5. currency - tokens that can be bought and sold on open marketplaces - may have fixed or variable value ( Ethereum vs Stable coin )
6. Fabric does not have a native token infrastructure yet in v2x

References

Key Concepts

IBM - Economic Impact of Blockchain - 2020

https://drive.google.com/file/d/1Umsfk4X7afh-RKUV4OODqNOkKBgfJHyC/view?usp=sharing

Web 3.0 concepts

https://www.linkedin.com/posts/gerardespuga_datos-blockchain-wallet-activity-6870654079010426880-j4hr

Really well done ! Thanks.
My only thought is control. Based on governance models, it can take many forms not just decentralized including hybrid. In the Web 3.0 model, Decentralized is possible where it wasn't practical before.

traits of Web 3.0 that fix what went wrong with today’s internet

https://cointelegraph.com/news/the-three-traits-of-web-3-0-that-fix-what-went-wrong-with-today-s-internet

Web 2.0 

Trust is handed to a small group of big companies ( OAuth2 )

Look at Facebook, Twitter controls of their networks

How to reach the original vision of being an open platform and global utility where anyone can contribute and build? 

Web 3.0 services

Open code

The open-source nature of Web 3.0 means that rather than proprietary code being hacked and leaked, contributors can collaborate on technology and features from day one.

Transparent economics

 the Web 3.0 economy is transparent, giving stakeholders the confidence that entrenched interests aren’t secretly pulling the strings and controlling outcomes in their favor

Aligned incentives

Web 3.0 is aligning incentives between creators, users and the platform itself. These incentives influence a platform’s accountability and governance, which then affects toxicity, inclusion and control.

Assumptions on Web 3.0 accountability and governance - need to rethink carefully

governance is often decentralized via a decentralized autonomous organization, or DAO, or other ingrained community feedback mechanisms. By decentralizing community management away from centralized authorities, there’s a tendency toward self-moderation. Communities built around shared passions enjoy natural moderation and when community members step out of line, the community takes action. And if a community member dislikes something, they can submit proposals for community vote to change the platform’s direction.

Web3. Is it the Internet of the future

https://www.npr.org/2021/11/21/1056988346/web3-internet-jargon-or-future-vision

In a Web3 world, people control their own data and bounce around from social media to email to shopping using a single personalized account, creating a public record on the blockchain of all of that activity.

Web3 movement has been helped along by the rise of NFTs, or non-fungible tokens, which are digital collectibles and other online files that can be bought and sold with cryptocurrency.

Web2 companies will be folding Web3 ideas into their services to stay relevant.

But true believers say there is no place for Facebook in a Web3 world, no matter how hard the social network tries to be part of the next generation of the Internet.

Web 3.0 is a set of solutions on a set of technologies

https://www.cbsnews.com/news/explain-web3-blockchain-crypto-nft-metaverse/

is it more than hype?

It is hype now like all the other tech terms have been

 "The tech's not new," he said, "but the marketing is."

A vision of Web 3 that will not meet expectations

d Web3 pioneer Gavin Wood envisions a new economy built around blockchain where individuals can provide services directly to each other, where no one entity owns or has control of the system, and where the ability to trade items of value exists inherently within the system.

Most innovation is delivering improved solutions to existing problems

"Wood's vision will require larger social, political and economic shifts. Enterprise companies today use blockchain to track how lettuce gets from the farm to the supermarket," Detwiler explained. "It's not revolutionary, but it's real."

Reality on Web 3.0 ?  Jim Mason

In theory, there's no difference between theory and practice

in practice, there is

DAO is not key to Web 3.0

Network roles, alignment on goals, accountability and governance is key to Web 3.0. That does not require DAO

DAO - Decentrailzed Autonomous Organization - Where does it add value?

Web3 Landscape Oct 2021.pdf

Investing in DAO - Decentralized Autonomous Organizations

https://a16z.com/2021/10/27/investing-in-friends-with-benefits-a-dao/

DAOs are internet-native, global collectives that share resources, build & deliver products and services, and work together toward common goals

DAO may meet formal expectations for the definition 

or may be a loose evolution of relationship rules, expectations and incentives in specific use case networks

Can a DAO exist without blockchain? Yes - GAPP

absolutely

see GAPP - https://www.alaskapollock.org/

They have a legal structure, formal organization models, incentives, metrics and no blockchain

The member organizations are independent, decentralized producers

The association for the members provides central administration and compliance of the VCN

Governance models and examples for DAO?

IreneDAO - a social collectibles DAO

https://cryptobriefing.com/instagram-model-launched-dao-web3-social-media/

• IreneDAO has become the talk of the crypto space after its first NFT collection soared in value on the secondary market.
• Irene Zhao launched the DAO to show the promise of her decentralized social media project SO-COL.
• Other similar NFTs have gained traction in recent months, while DAOs have also taken off.

IreneDAO launched Friday and has quickly taken off. NFT passes to enter the DAO are already trading at 1.25 Ethereum. 

 Each photo features text overlay, often with popular crypto memes such as “WAGMI” (meaning “We’re All Going to Make It”) and “gm” (“good morning.”) The stickers were then tokenized into 1,107 NFTs, described as an access pass to the DAO’s “Genesis Tribe,” and distributed with a free mint. They’re already trading at 1.25 Ethereum on OpenSea, around $4,125 at press time.

ConstitutionDAO - a DAO to buy a copy of the Constitution

https://cryptobriefing.com/constitutiondao-loses-sothebys-auction/

spoiler alert - the DAO lost to the higher bidder at auction

Despite raising over $47 million to bid on the document, the DAO fell short of winning.

This is not the first time crypto natives have been involved in major auctions and auction houses. Earlier this month, Beeple sold his ‘HUMAN ONE’ sculpture, a 7-foot-tall NFT-paired astronaut, at Christie’s for just shy of $29 million. In March, he sold his “Everydays: The First 5,000 Days” NFT for $69 million—paid for with 42,329 ETH, which would have been worth over $169 million at today’s prices

Is a DAO fun to work for even if there is no money? Some say yes

https://finance.yahoo.com/news/were-freaking-daoing-people-think-172943284.html

DAO in Banking - EBI - European Banking Institute

Decentralised Autonomous Organizations- Targeting the Potential-EBI-2024.pdf.  link

Decentralised Autonomous Organizations- Targeting the Potential-EBI-2024.pdf file

digital-asset-tokenization-summary-2023.pdf

digital-asset-tokenization-summary-2023.pdf file

tokenization-of-rwas-beyond-the-hype

Asset Tokenization Workflow Concepts

https://www.linkedin.com/posts/jherencia_blockchain-tokenization-consultancy-activity-7143857705886154752-cLT-?utm_source=share&utm_medium=member_desktop

𝐓𝐨𝐤𝐞𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐭𝐫𝐚𝐧𝐬𝐟𝐨𝐫𝐦𝐬 𝐩𝐡𝐲𝐬𝐢𝐜𝐚𝐥 𝐚𝐬𝐬𝐞𝐭𝐬 𝐢𝐧𝐭𝐨 𝐭𝐨𝐤𝐞𝐧𝐬 𝐭𝐡𝐚𝐭 𝐜𝐚𝐧 𝐛𝐞 𝐭𝐫𝐚𝐝𝐞𝐝, 𝐫𝐞𝐜𝐨𝐫𝐝𝐞𝐝, 𝐨𝐫 𝐬𝐭𝐨𝐫𝐞𝐝 𝐨𝐧 𝐚 𝐛𝐥𝐨𝐜𝐤𝐜𝐡𝐚𝐢𝐧, offering accessibility, liquidity, and security.



Blockchain use tokenization to represent digital or physical assets on a network. Each token has a value often related to the asset it represents. They can be exchanged, sold, or invested, creating a dynamic digital asset economy.



Tokenization is able to disrupt finance, real estate, art, entertainment, intelectual property...



But why?. Why we need tokenization? 𝑻𝒐𝒌𝒆𝒏𝒊𝒛𝒂𝒕𝒊𝒐𝒏 𝒄𝒓𝒆𝒂𝒕𝒆𝒔 𝒂 𝒍𝒆𝒗𝒆𝒍 𝒑𝒍𝒂𝒚𝒊𝒏𝒈 𝒇𝒊𝒆𝒍𝒅, 𝒅𝒆𝒎𝒐𝒄𝒓𝒂𝒕𝒊𝒛𝒊𝒏𝒈 𝒂𝒄𝒄𝒆𝒔𝒔 𝒕𝒐 𝒗𝒂𝒓𝒊𝒐𝒖𝒔 𝒂𝒔𝒔𝒆𝒕𝒔. 𝑴𝒐𝒓𝒆 𝒑𝒆𝒐𝒑𝒍𝒆 𝒄𝒂𝒏 𝒆𝒏𝒈𝒂𝒈𝒆 𝒊𝒏 𝒕𝒉𝒆 𝒇𝒊𝒏𝒂𝒏𝒄𝒊𝒂𝒍 𝒆𝒄𝒐𝒔𝒚𝒔𝒕𝒆𝒎 𝒅𝒖𝒆 𝒕𝒐 𝒕𝒉𝒆 𝒍𝒐𝒘𝒆𝒓 𝒆𝒏𝒕𝒓𝒚 𝒃𝒂𝒓𝒓𝒊𝒆𝒓 𝒕𝒐 𝒇𝒐𝒓𝒎𝒆𝒓𝒍𝒚 𝒓𝒆𝒔𝒕𝒓𝒊𝒄𝒕𝒆𝒅 𝒎𝒂𝒓𝒌𝒆𝒕𝒔. 𝑨𝒅𝒅𝒊𝒕𝒊𝒐𝒏𝒂𝒍𝒍𝒚, 𝒕𝒐𝒌𝒆𝒏𝒊𝒛𝒂𝒕𝒊𝒐𝒏 𝒖𝒔𝒆𝒔 𝒃𝒍𝒐𝒄𝒌𝒄𝒉𝒂𝒊𝒏 𝒕𝒆𝒄𝒉𝒏𝒐𝒍𝒐𝒈𝒚 𝒕𝒐 𝒅𝒆𝒍𝒊𝒗𝒆𝒓 𝒖𝒏𝒓𝒊𝒗𝒂𝒍𝒆𝒅 𝒔𝒆𝒄𝒖𝒓𝒊𝒕𝒚 𝒂𝒏𝒅 𝒕𝒓𝒂𝒏𝒔𝒑𝒂𝒓𝒆𝒏𝒄𝒚, 𝒍𝒐𝒘𝒆𝒓𝒊𝒏𝒈 𝒕𝒉𝒆 𝒄𝒉𝒂𝒏𝒄𝒆 𝒐𝒇 𝒇𝒓𝒂𝒖𝒅 𝒂𝒏𝒅 𝒃𝒐𝒐𝒔𝒕𝒊𝒏𝒈 𝒑𝒍𝒂𝒚𝒆𝒓 𝒄𝒐𝒏𝒇𝒊𝒅𝒆𝒏𝒄𝒆.



Lets take a look to these simple but essential steps we need to follow in order to achieve a good real world asseet tokenization:



1️⃣ Asset Selection



2️⃣ Market Research



3️⃣ Regulatory & Compliance



4️⃣ Legal & Financial Structure



5️⃣ Product Strategy



6️⃣ Technical Infrastructure.



7️⃣ Docs & regulatory Filings



8️⃣ Security and QA



9️⃣ Launch Prep and Marketing.



1️⃣0️⃣ Secondary Market & Scale



And this is just the beginning. Be sure to follow these steps and don't follow "experts" that go to TV or with ZERO background. Legal or Business, Tech or Financial. Read, research and do your own investigation before launch a tokenization project.

Andy Martin - Thoughts on DLT economies and tokenomics

https://www.linkedin.com/posts/andy-martin-387188a_blockchainthoughtfortheday-tokeneconomythought4theday-activity-6843368274709770241-ac56

Blockchain - the longer one works with big businesses / enterprise the more one understands their need to reinvent themselves as their old business models stop working. The clock stops for no one and everyone has a sell by date. That reinvention is the job of the CEO - the problem many enterprises have is the CEO instead reduces cost on the existing business model to increase their short term bonus. The problem here is that many boards of directors are promoting this behaviour as that is what shareholders “want.” The problem here is that most shares/ equity are owned by institutions rather than owned directly by the community. The problem here is that power in capital markets rests in too few hands with the wrong incentive structures. The answer is to reinvent capital markets with new forms of ownership - the answer is new decentralized business models built on blockchains

Me

without making this a long response, you're hitting on issues outside the scope of DLT for sure here. In the real world there are companies successfully transitioning to new business models and getting useful input from stakeholders across the board. They also have effective vision and planning management that extends beyond the next 12 or 24 months reporting cycle. In some cases, they work as effective networks now with their suppliers, competitors and customers even WITHOUT DLT. Do I have a list of 100's of those ? No. A few sure. Real effective change is hard. Some can pull it off.

Andy Martin - Blockchain Value Propositions in Web 3 World

https://www.linkedin.com/posts/andy-martin-387188a_blockchainthoughtfortheday-activity-7014015169735315456-gvgb?utm_source=share&utm_medium=member_desktop

So, what is the problem fixed by web3?
==============================
I had a go at trying to summarise blockchain’s role in this new internet of public and private, chains that is web3. I tried to define the problem that blockchain fixes from the perspective of the enterprise.

PROBLEM
“A blockchain makes trade of anything, for anything, in a data or digital asset form on the internet, much more liquid and enables owners of that data to retain control & monetisation of their data, without the need of a trusted intermediary to guard against double spends
 
BY
1.    Representing ownership, and fractional ownership, in tokens (aka digital assets) that implement public or private autonomous agents (aka: smart contracts providing certainty of execution) to govern the trade in ownership of those tokens, including providing any needed finance (DeFi)
2.    Clearing and settling at the same time by using truly digital money in tokens to increase velocity and enabling micro or nano payments for the cost of an email
3.    using a distributed and decentralised ledger (level 1 system of record) where changes of state (e.g., change of ownership or certainty of provenance) are made in public or private blocks of transactions using consensus algorithms (e.g., proof of work or proof of stake) to ensure randomness aka decentralisation, in the selection of the leader to propose those ledger updates and to ensure community acceptance of those updates and subsequent censorship resistance of ownership by any one party acting alone as multiple parties govern the data
4.    Providing certainty of identity of buyer and seller at the level of wallet addresses and their reputation (permissionless) or interoperability of the wallet to permissioned credentials for KYC where appropriate
5.    Incentivising helpful behaviours (e.g., maintaining the ledger) by awards of tokens and share of app. transaction processing fees to the community (DAO) treasury
6.    Use of ML agents to share public or private data learnings only (not the data itself) or use of ZKP to keep actual data private
7.    Scaling as appropriate using level 2 protocols
8.    Governing the rules and treasury of the marketplace community (DAO) by voting by governing token holders
 
TO
Create a new class of internet transaction with the new capability not to commoditise your business by giving up control of your data to any central aggregator, to grow a new data economy in new primary & secondary markets, with the birth of new competing business models or apps., so that the members of the community receive a fair and transparent outcome to make them all better off by solving problems that can only be solved by collaborating to bring together data from multiple actors in new ways across value chains and across industries.”

That’s quite a mouthful. The rest of the book will be about explaining what this all means.  #blockchainthoughtfortheday

Andy Martin on Tokenomics use cases in Web3 

https://www.linkedin.com/posts/andy-martin-387188a_blockchainthoughtfortheday-activity-6984027181219729408-Aub9?utm_source=share&utm_medium=member_desktop

Token economy - Where might the enterprise start? Think of those three token and credential types of identity, ownership and value. We're going to have to start with identity, be it pseudo anonymous or KYC. Then we're going to have to understand what is being bought and sold, so we have the provenance of that asset. We need to have the data to eliminate ecosystem reconciliation, so that everybody can agree on what's going on in the market.

Then we can then move into that reinvention, as we move into the Token Economy, such as with the car e-wallet. Finally, we move into the value exchange in the marketplace, perhaps at that machine-to-machine, micro level.

Read and listen some more in "The Token Economy (part 2)" - links in comments

Token Economy Primer - Andy Martin - 2022

Token Economy Primer - Andy Martin - 2022 v3

Token Economy Primer v2 Andy Martin 2022-1644485887587.pdf file

Token Economy Use Cases

token-economy-primer-andy-martin-1649569802508.pdf

https://www.linkedin.com/feed/update/urn:li:activity:6918797287057973248/

DAO Governance Concepts

DAO Governance Concepts - Andy Martin - 2022

GDP of DAO tokenomics-Financial-Disclosure-2022-andy-martin.pdf file

DAO Summary - Andy Martin

https://www.linkedin.com/posts/nishant-trisal-7b305156_blockchainthoughtfortheday-tokeneconomythought4theday-ugcPost-6907639602472181761-HDAF

"A DAO is just a bunch of folk (e.g., enterprises) who share common values codified into smart contracts. Folk buy the DAO’s token to fund a digital business. This funding can be leveraged by DeFi smart contracts to lend tokens at interest. The DAO builds digital products and services for consumers. Digital products are fueled by data monetised by earning the DAO’s token. This data is owned and controlled by self sovereign identities (Individuals and companies in the network) in Non Fungible Tokens, linked to the physical, if needed. The DAO is run for the benefit of DAO token holders who vote for decisions of the DAO."

Rise of the networked business

double entry bookkeeping.

It separates the bookkeeping for this new separate thing (one entry) from the owners or shareholders of that thing (the second entry.) So the balance sheet of assets minus liabilities of that new limited liability company = shareholders' value

is a great business model

a great way to do business and so companies existed beyond that one mission. This was a great structure for investors to take a share of the profits of trading activity through buying equity or shares in the company. Or by lending to fund operations at an interest rate fair against the likelihood of the company going bust if the debt was not being repaid.

business network organization models

1. one huge monolithic business - Venetian style
2. separate business silos, B2B, with visibility limited to one up and one down, in the value chain.
3. link up and fund all the little guys into one networked business

Tokenomics white paper 

https://www.linkedin.com/pulse/token-economy-andy-martin-2f/

tokenomics-andy-martin-wpaper-2021-SSRN-id3972111.pdf

Suggested Citation: "Martin, Andy, The Token Economy (October 16, 2021). Available at SSRN: https://ssrn.com/abstract=3972111 or http://dx.doi.org/10.2139/ssrn.3972111 "

Youtube channel

https://www.youtube.com/channel/UC2x-oex0yp890bEogiMxgMw

Andy Martin - 4 Views of a Token Economy - Let's add VCN

https://www.linkedin.com/posts/andy-martin-387188a_blockchainthoughtfortheday-tokeneconomythought4theday-activity-6882278244435931136-rTV2

Thanks for outlining 4 use case scenarios.
My focus is another option>>

VCE = Value Chain Economy = integrated digital economic communities with multiple parties, roles

for more, see >> VCE > Value Chain Economies: micro economies for value-chain communities ( VCC )#VCE-ValueChainEconomiesareVirtualDigitalCommunities

s Blockchain Opportunity Assessment - BOA#BOA-KeyQuestionsforVCE%3AValueChainEconomies

VCN - Value Chain Networks is a business network based on value.

VCN = A more relaxed view of a DAO

Certainly a logical next step for all the good work you have put together ( which I use liberally I might add ). The DAO economics are good. My only thought is the DAO model presentation. Other DAO posts reflect a "restrictive" model of how to operate, especially when I look at how other authors define the same concept. Given good networks often evolve over time just like good companies do, I have used a more open notion of VCN - Value Chain Network - where it fits. The tokenomics and governance concepts still apply. As a concept, it has fewer restrictions that others sometimes impose on a DAO model.

The Internet, blockchain, cloud, AI, Iot, etc are all part of the "plumbing" that real solutions are built on

Thanks for your thoughts but I see replacing the DAO with VCN instead. It's not the ledgers. It's a different business model than the more restricted DAO model

VCN features

1. The members may be peers in the same role, operate in different roles or in a combination
2. The operation of the network may be fully or partially decentralized
3. The network may have a legal framework, independent regulators or not
4. The network has informal or formal covenants governing the responsibilities, operations and benefits members receive from the network
5. The network membership model may be open or closed
6. Some cooperatives may have qualified as VCNs

Andy Martin - Web 3 and Tokenomics model article

https://www.linkedin.com/pulse/3-layers-decentralised-equity-andy-martin/

Back to the Future in the Digital Economy

• The theory says the past is ready to be disrupted by something completely different
• The reality is the best version of the future comes from the past - it evolves to the future
• You need to know 3 things about the past value chain networks
  • how trust works
  • what can be improved
  • what worked well

Digital or web 3.0 business will be ecosystems or networks with their own internal market currency

This token - this utility token - will govern everything from funding, to voting to buying & selling, to incentives for helpful behavior.

and as that link is loosened it will allow equity-like growth in the "industry protocol." This is digital investing in the 21st century.

Digital Value Chain Network

Assets - Tokens - Incentives- Trust

Without an economic incentive you won't get folks to collaborate - so you don't have a network. What you need to build an economic incentive in the first place, is a marketplace currency that you can control, to democratize value over the ecosystem to encourage that collaboration

Tokens

Tokens can represent a digital or a physical asset. An asset can be a thing, data, a service or a right.

VCN Design checkpoint list

are there multiple roles in the network that complement each other ( eg a supply chain )?

are there standard business rules, governance or regulations are members operate under?

is there a clear process among members for changing  business rules?

are the assets common, registered, regulated, unique?

what benefits can similar members receive coordinating together?

what risks do members have working together?

what types of activity have to be tracked on the network ( orders, shipments, trades and ? )?

what types of behavior help the network roles operate more efficiently?

what types of incentives are valuable to network roles, members?

what types of tokens are useful?  ( payment, asset tracking, operations behavior ? )

Business Model Layers

Layers

Member Access Services ( includes wallets, IAM and more )

Applications and services

Business VCNs

Ledgers - layers of interoperable ledgers, networks

Web 3 Foundations

Trust, Identity ( SSI ), Credentials Management ( TOIP ), Access Management, Governance Services, Security Services, Registries, Tokens, Digital Assets, Ledgers, Network Services, Persistence, Automated Event Management, Data & Document Services, Resource Management Services, Proxy Services

Good thoughts overall.

I like the questions you raise at the end. Look at where trade and wealth is today. Ask what risks are managed? What guarantees are provided? That helps understand what the capabilities required for next generation solutions.

Tokenomics resources

Andy Martin - building a business network is hard 

https://www.linkedin.com/posts/andy-martin-387188a_blockchainthoughtfortheday-tokeneconomythought4theday-activity-6844522487561105408-Gpne

Blockchain - this is about transformation at the level of a market or even an entire industry. I’ve been working in business transformation and integration for 30 years and I can tell you it is really hard to get different departments in just one company to talk to each other and effect change. And they all have the same ultimate boss. It is even harder to get three or four companies to talk to each in a minimum viable ecosystem in a network. It is even harder to get 20 or 30 companies in a market to talk to each other. It is even harder to get 100’s or 1000’s of companies in an industry to talk to each other. It’s hard, really hard. But. Understand network effects. We are building a new version of the internet, industry by industry - where data can be trusted and shared B2B - trusted data at the level of a market - for the first time. This is rocket fuel for innovation and offers almost unbelievable value creation. And this is happening - maybe not in the expected traditional markets - maybe in new markets instead - - but just look at DeFi. So the question for today is - is it easier to reinvent markets from a blank sheet of paper or do the incumbents have an advantage over these start ups and will we optimise traditional incumbent markets first and then reinvent them? When the first iPhone arrived it made us all realise what “a lot better” actually meant. Do the incumbent industry players have an advantage over the blockchain start ups and will we optimise traditional markets first before we reinvent them? Or will we bypass the incumbent and go straight to the reinvent the industry stage and add digital value on top of the incumbent commoditising their business or maybe in a more digital industry make them redundant?” Should our business leaders be worried? #blockchainthoughtfortheday #tokeneconomythought4theday

me

"What, me worry?" 

Andy Martin focuses on economic models for DLT solutions

https://www.linkedin.com/posts/andy-martin-387188a_blockchainthoughtfortheday-tokeneconomythought4theday-activity-6872077060467146753-u5wN

You've done really well generating useful discussions, synthesizing ideas into valuable economic models. Your work has become an important reference in many ways for most DLT projects in any domain.

The key is not the technology but how it's used that determines value to the participants. Your focus on trust, economic incentives, network effects and behaviors of participants is the reason for offering useful DLT solutions

Andy Martin Token Economy Videos

Andy Martin's Tokenomics videos

https://www.linkedin.com/pulse/token-economy-andy-martin-1e/

tokenomics-andy-martin-The Token economy-videos.pdf

5 biz template 1

https://www.youtube.com/watch?v=_DKArcvL2eI

Andy Martin - Token Economy - Part 1

https://www.linkedin.com/pulse/token-economy-andy-martin/

tokenomics-andy-martin-The token economy _ LinkedIn

Possibilities

1. New business models with smart devices bargain connected in micro-transactions
2. Payment methods allow real-time clearance and settlement in some cases
3. Ownership and value are exchanged simultaneously
4. New secondary markets make ill-liquid assets liquid by fractionalisation
5. Slow, expensive and manual paper processes needed for trade are put into smart contracts. Anything of value can be tokenised to be traded including physical assets
6. Tokens can reward good marketplace behaviors

The theory - no middleman
trade value, peer to peer, without the need for anyone in the middle to make sure ownership is transferred with no double spend

The reality
There IS a financial blockchain payments platform in the middle. Just like POP money has Zelle or Venmo in the middle. Easier? True. No middle man? False.

The theory - blockchain payment systems are trusted

The trusts in theory

• identity - who the parties are
• provenance - of the products or services and payment exchanged
• exchange guarantees - smart contracts can guarantee execution as atomic.

The trusts in reality

• identity - who the parties are - low risk of digital identity fraud
• provenance - of the products or services and payment exchanged still need verification but much of the data is cryptographically verifiable
• exchange guarantees - smart contracts can guarantee execution as atomic but the digital transaction needs physical confirmation in many cases on the value and quality exchanged

Digital Economies integrated by Blockchain 

From Andy Martin, IBM

https://www.linkedin.com/pulse/my-first-week-vblogs-blockchain-andy-martin/

One view of Blockchain Network Operations Funding

How is the data layer funded?

1. a consortium operating in the innovation layer or other business models may fund it based on revenues or another factor
2. a platform provider may fund it especially if they have strong profits in the innovation layer
3. it may not have a well defined business model

Evolution of a Token Marketplace

1. Decentralized network creates shared data
   Provenance of assets is created as supply chains are digitized. B2B shared processes are captured in private enterprise blockchains as source of the truth is created and ecosystem reconciliation is eliminated. This creates a new asset of trusted data at the level of a market.
2. New services evolve from trusted data
   New quality of data may be traded in open marketplaces to new types of innovators bringing new services to market to make the most of this new trusted data at the level of the market.
3. Liquidity improves
   Markets achieve a new level of liquidity as primary issuance onto the market is tokenised along with the digitally native payment rails.

Blockchain Trends toward Hybrid

Decentralization Journey

require technology innovation in bringing fast, fair and secure consensus methods to run at scale. 

different than current blockchain consensus in most cases

new decentralized trust framework.

Decentralized Trade Finance

Blockchain is a back end technology (1) holding the provenance of who owned and who did want and when. At the front end, in our wallets, a token's private key gives ownership of that digital asset. The smart contract makes trades in ownership possible but the user experience is defined outside of the blockchain.

Smart contracts allow blockchain to provide governance

So finally we have all the pieces to define the token economy. Trades on our digital marketplaces are made by business, consumers or things. Trades are made using tokens denoting ownership or representing value for settlement. We know the identity of who we are trading with based on their credentials and we know what we buying based on the provenance of the asset.

Andy Martin - Token Economy - Part 2

https://www.linkedin.com/pulse/token-economy-andy-martin-1f/

tokenomics-andy-martin-The Token Economy-part 2.pdf

problem fixed is decentralizing power in B2B(2C) marketplaces. "My keys - my asset" to sell and govern. We fix the problem by collaborating first to create this fairer marketplace and then we compete on top. The magic sauce are new types of incentives using utility tokens.

blockchain - what's different?

key is trusted data in a decentralized marketplace governed transparently

Do we need a central authority ?

What problem does blockchain solve?

Blockchain in banking

"tokenisation of anything" gives us great velocity and liquidity in markets. Adding in innovative new identity and compliance models (e.g. shared collateral tracking) gives us lower cost compliance and opens up fairer and responsible (sustainable) banking to all.

Simple token taxonomy

good token taxonomy models exist but the simplest from Lisa JY Tann is: security (ownership), utility (governance and reward) and value (all forms of money).

Enterprise blockchains have traded-off some of the disruptive benefits of decentralisation ("my keys -my asset" secure from censorship resistance) in order to met enterprise requirements in optimising today's world. Reinvention of marketplaces is enabled by combining the best of both of these worlds in emerging hybrid patterns

Utility token incentives can be used to drive helpful behaviours at the level of (1.) the infrastructure, (2.) access to services in new marketplaces and (3.) democratising benefits in autonomous business models.

How is trusted data created?

foundations for our new marketplaces are collaborative and open so that everyone can join - including competitors. Hybrid thinking drives privacy and utility tokens reward those infrastructure providers who validate and endorse transactions and provide nodes.

Innovation driving by new blockchain technologies - monetize data, information

Market place model - value pricing vs cost pricing

Commercial Model

Blockchain Trinity - business, incentives, governance

Summary 

Andy Martin - Token Economy - Part 3

https://www.linkedin.com/pulse/token-economy-andy-martin-2f/

tokenomics-andy-martin-The Token Economy-Part-3.pdf

The rules of that value exchange can be automated in a smart contract. If the conditions or rules are met, then ownership will be transferred. No one can stop that smart contract from executing – and no one person but everyone is in charge.

ownership and value transferred at T0

We transfer value and ownership, at the same time - no post trade settlement is needed (T0). For that you need money – or value – that is digitally native on the internet - and that is a stable coin or a crypto.

Utility token is key for market behaviors - risk is value is not perceived - see current real models ( free TV )

Now we have one thing left to define in our token economy. And that is the utility token. You see if no one person – in fact if all of us, in the community oversee governing these trades then how do we do that? Well, that’s where this utility token comes in handy. We might ask the folks who write smart contracts to buy these tokens and stake them in order to run their smart contracts in our community. We might ask folks to buy these tokens as access to the marketplace / platform where these trades take place. We might assign voting rights to these tokens to help in making decisions for our community

Economic activity goes through the roof as velocity and liquidity is truly digitized as paper and reconciliation and powerful intermediaries - that is the web platforms of today - are swept away

DeFi - using smart contracts to bring borrowers and lenders together.

you can link this new digital economy to the physical economy that we have today. We start by bringing lots of small lenders together to provide digital liquidity (edit) e.g., in the form of a stable coin. The DeFi marketplace brings buyers and sellers together to create the credit to fund supply chains.

Components in a Token Economy on Blockchain

Token economy - we think of shared processes (blue) across the value chain B2B2C and local processes (red). You can think of the shared process (as a thin layer to automate all those phone calls, emails and paper documents that today integrate your private processes with your up-steam and downstream B2B trading partners and ultimately to the end customer/consumer. For the shared process, private keys are held in wallet or agent with the front end user experience and related logic. The shared process itself is where we have the rules to govern transfer of value and ownership, these are decentralized state updates to the blockchain as we codify & automate trading of digital assets. The shared data in the blockchain gives us the the provenance of who did and who owned what in our digital assets (or values store) representing an immutable decentralized & distributed shared source of the truth

Who pays for token networks?

Token economy - who will pay for and who will start an industry platform has been the biggest challenge in enterprise blockchain.

 The problem is to fund a distributed and decentralized network and to reward risk takers.

 The way to reinvent industries in the collaborative economy to come is to design, launch and own tokens in the winning industry protocols.

the business model exists at the platform level, network level and application level

Token Business Model Templates

Token Business Model Template 1

https://media-exp1.licdn.com/dms/document/C4D1FAQEVmDy0h1lRHw/feedshare-document-pdf-analyzed/0/1638073688759?e=1638316800&v=beta&t=xX394YoATzmCdXx0AQ7bzpajmbk7qgFjFeEz7OnHmrw

anything can be traded for anything on our marketplace. But it is micro changes of behaviour to create win-win-win outcomes that we seek. Our utility token does many jobs - voting, payments, incentives - this token may take on equity like properties loosely coupled or even independent from fiat - or tightly coupled to fiat. The role of our reserve fund is to make our community currency the most useful. We dont want token to leak out of the economy but from time to time it needs to as capital leaves or enters the DAO. At least this is the model in my mind.

Utility Tokens

https://www.linkedin.com/posts/andy-martin-387188a_token-economy-ownership-activity-6705736204945514496-RFux

 This is a new form of decentralized equity to reward platform owners and decentralized delegates. In creating our decentralized hybrid token marketplaces the incentive in the form of a platform utility token is key. This token is used to pay public permissioned delegates to validate transactions and to create blocks. It is bought as a stake by these decentralized service providers in order to gain the right to validate or order. Finally is used as a transaction fee which also serves as a protection against spam/DDoS attacks

Andy Martin - Token Economy Challenges - Governance for Competitors, Infrastructure payments

https://www.linkedin.com/posts/andy-martin-387188a_the-token-economy-activity-6869885734069800960-HsoT

tokenomics-andy-martin-token-economy-211116.pdf

Token economy - there remain two big barriers with enterprise blockchain. How to both collaborate and compete on the same network and how to fund the infrastructure layer.

I talk about both of these in my Token Economy whitepaper.

The first is a function of the security model and strategic decisions. The strategic decisions relate to identification of industry issues where there is no need to compete and to the dynamic composability of ecosystems in parachains. Here we see ecosystem “A” competing against ecosystem “B” in agile and reconfigurable ways. The security model comes down to interoperability of private data and private processes with public processes and public data.

The second is a function of the emergence of industry protocols which are monetised by utility tokens in a decentralized equity like fashion.

You can get an introduction to these topics in the attached paper. In order to read more about the emergence of new types of accounting to support decentralized equity, you can read my point of view about this which is available on my profile page https://lnkd.in/dW5JHkhv here

Andy Martin - Token Economy - 11/15/2021 - white paper

https://www.linkedin.com/pulse/token-economy-andy-martin-2f/

Andy Martin - Token Economy - 11/15/2021 - videos

https://www.linkedin.com/pulse/token-economy-andy-martin-2f/

Utility Token usage

Utility token life cycle includes:  mint, purchase, sell, spend, burn, redeem, convert

Conversions to fiat best with stable coins

Sample Business Use Cases for Tokens - Andy Martin

https://www.linkedin.com/posts/brian-graves-23518938_multiplesclerosis-blockchainthoughtfortheday-activity-6805836037999357955-DJ98

https://www.linkedin.com/posts/andy-martin-387188a_tokeneconomythought4theday-blockchainthoughtfortheday-activity-6853895712967532544-3Zty

Token economy - it’s important to understand that the business model exists at the platform level, network level and application level. There are three types of platform. General applications support smart contracts and are Turing complete. Digital assets are focused on payments. And cross chain allow the composition of composable business built from component parts from different chains. The platform token is used to reward providers of technical platform services. Networks are built on these platforms. The organisation of these networks is decentralized and autonomous and is governed on chain via a governance token. This is used both for decision making and to drive helpful behaviors by network members such as providing access to the networks’ digital products and services to known identities (e.g., by reputation such as certified sustainable and responsible suppliers or by ownership of an NFT.) Applications are build on each network. Each will have its own business model and again tokens can be used to drive helpful behaviors. Networks tend to be built by industry but industry boundaries will blur and cross industry networks will emerge. It is important that these networks do not become monolithic but instead components remain composable and loosely coupled. In these ways utility tokens are used to build business models in the token economy to come. The models are not used to optimize the world as we know it today. Rather these models are used to reinvent industries using disintermediation the incumbent if they are passive and let web 3.0 happen to them rather than drive the changes that are coming fast.

Token Types

m Tokens#TokenTypes

https://invao.org/token-classes-explained-coin-vs-utility-token-vs-security-token/

But it’s actually quite simple: Coins are a currency, utility tokens offer a right to use a product or service, and security tokens represent an investment product.

1. Security token is an investment with a defined stake in assets ( eg company eps, fixed assets etc )
2. Coin token is a digital currency ( an alternative to fiat currency )
   1. coins bought and sold through exchanges for a fee
   2. coins can have fluctuating value ( value store ) like Ethereum, Stellar etc
   3. coins can have stable values ( value transfer ) like USD coin etc
3. Utility tokens have specific value in a defined context ( eg buy a product or use a service in  online marketplace etc )
   1. To use a utility token outside the platform, it is normally redeemed for digital currency or fiat currency unless there is an ecosystem that accepts it
   2. Investors can buy these tokens and use them as a means of payment on the platform developed by the issuing company.
4. Single Use tokens
   
   1. issued by party A to party B for party B to execute a transaction on A's blockchain using a smart contract one time only

What are utility tokens

https://blog.sfox.com/what-are-utility-tokens-and-how-will-they-be-regulated-89cfb6bb2a45

Using Utility Tokens

A Uber token, for example, could be used to pay for a ride with a Uber car. But not for anything else. If you wanted to use the Uber token to buy another product or service, you would first have to exchange it against either fiat money or a crypto-coin such as bitcoin.

Token Creation

Use an Exchange Service to create new token and an ICO

Custom Tokens on HLF example 1 - for ERC20 wallet

https://medium.com/deqode/erc20-tokens-on-hyperledger-b82399b4b969

Sample token framework example for HLF and ERC20 wallets

Github links

https://github.com/grepruby/ERC20-Token-On-Hyperledger/tree/v1.0/chaincode/token_chaincode/node
https://github.com/grepruby/ERC20-Token-On-Hyperledger/tree/v1.0/chaincode/token_chaincode/node/tokens

it sets up a token network based on Fabric and shows the use of a smart contract for using ERC20 token (still a token and principles/functions of using it still apply etc...)

Issue custom tokens on the Stellar Network for use in HLF solutions

https://www.lumenauts.com/guides/how-to-issue-a-token-or-ico-on-stellar

tokens-lumenauts.com-How to Issue a Token or ICO on Stellar.pdf

Interwork Token Architecture

https://interwork.org/

The value exchange layered protocol for Interwork opens many doors 

https://www.forbes.com/sites/vipinbharathan/2020/06/07/digital-assets-ecosystem-will-be-powered-by-end-to-end-standards/#1b13be873fd8

Monetize and Tokenize Data

Ocean Protocol Network

https://blog.oceanprotocol.com/how-to-monetize-tokenize-data-8f860e405773

four building blocks needed to make this vision of open data sharing a reality. This open system allows every data provider to monetize and tokenize their data, so that data itself could be a sustainable business model. Once I explain how data can be used more openly, can we then apply the tools of finance to it?

Ocean architecture

https://docs.oceanprotocol.com/concepts/architecture/

• Components

  • Tier 3 - Application Layer
  • Tier 2 - Protocol Layer
  • Tier 1 - Decentralized VM Layer
• Interactions

https://docs.oceanprotocol.com/concepts/secret-store/

Ocean Software components

https://docs.oceanprotocol.com/concepts/components/

Keeper

A computer running an EVM-compatible blockchain client (such as Parity Ethereum) where the associated blockchain network is running the Ocean Protocol keeper-contracts (smart contracts).

Secret Store

A Parity Secret Store: software for distributed key pair generation, distributed key storage, and threshold retrieval. It’s used to store asset access-control keys.

Acquarius item metadata manager

Marketplaces run Aquarius to store and manage metadata about the assets available in their marketplace. It provides an HTTP API for interacting with an off-chain database (sometimes called “OceanDB”).

Ocean DB Drivers

Aquarius supports several options for the off-chain database (OceanDB), including Elasticsearch and MongoDB. One can add support for another off-chain database by creating a new driver similar to the existing OceanDB drivers.

Birzio to manage access to market assets

Publishers run Brizo to manage interactions with marketplaces and consumers. It interacts with the publisher’s cloud and/or on-premise infrastructure.

The most basic scenario for a publisher is to provide access to the assets the publisher owns or manages, but Brizo can do much more.

Events Handler

Brizo communicates with the Events Handler to deal with Keeper Contracts events.

The Events Handler monitors Service Execution Agreement (SEA) events and acts as a provider agent to grant access and release rewards for the publisher/provider. This is a critical part in the process of consuming data sets in the Ocean Protocol network.

Every provider in the network must run some sort of an events handler to be able to fulfill the access condition of an Access service in a Service Execution Agreement.

Osmosis Drivers

Brizo supports several options for file storage, including Azure Storage, Amazon S3 and on-premise storage. One can add support for another file storage option by creating a new driver similar to one of the existing Osmosis drivers.

Squid Libraries

Client libraries used by applications (such as Pleuston or Jupyter notebooks) to interact with Ocean components, including Keepers, Aquarius nodes, Brizo nodes, etc.

Commons Marketplace

An online example marketplace/publisher for consumers to explore, download, and publish open data sets in the Pacific Network. Implemented using React and squid-js.

For more information, see the blog post about Commons Marketplace.

Pleuston example marketplace publisher

An example marketplace/publisher front-end for developers to explore, download, and publish assets in an Ocean Protocol network. Implemented using React and squid-js.

Ocean Tutorials

https://docs.oceanprotocol.com/tutorials/introduction/

Potential Value Opportunities

Citi-MONEY, TOKENS, AND GAMES-Blockchains Next Billion Users and rsch_pdf_30143792.pdf

Citi-MONEY, TOKENS, AND GAMES-Blockchains Next Billion Users and  rsch_pdf_30143792.pdf file

Citi-MONEY, TOKENS, AND GAMES-Blockchains Next Billion Users and rsch_pdf_30143792.pdf link

CBDCs by large central banks as well as tokenized assets in gaming and blockchain-based payments on social media

* Blockchain can potentially create new markets and applications worth trillions of dollars.

* The next billion #blockchain users will come from emerging markets driven by the need for financial inclusion and economic opportunity.

* Games are a key driver of the adoption of blockchain technology, as they provide a fun and engaging way for people to learn about and use blockchain.

The report highlights a number of key trends that are driving the adoption of blockchain, including:
1) The rise of decentralized finance (#DeFi)
2) The growth of non-fungible tokens (#NFTs)
3) The increasing popularity of play-to-earn games (#P2E)
4) Asset tokenization and digital securities
5) #CBDC can be the killer blockchain use case

Key technology trends to watch:
1) Zero-knowledge proofs
2) Data Oracles
3) Bridges for interoperability
4) Smart Legal Contracts

blockchain needs the help of technology enablers, including (1) decentralized digital identities, (2) zeroknowledge proofs, (3) Oracles, and (4) secure bridges. 

Tokenization Playbook - 2023

https://www.linkedin.com/posts/loicstaub_tokenization-playbook-may-2023-ugcPost-7063876910610542592-1kwm?utm_source=share&utm_medium=member_desktop

tokenization playbook 2023.pdf. link

Silvan Andermatt

digital-asset-tokens-basics-of-tokenization-2023.pdf link

digital-asset-tokens-basics-of-tokenization-2023-1681050504836.pdf file

Unregulated (mostly) Digital Assets:

1) Cryptocurrencies and Utility Tokens

2) Stablecoins

Regulated Digital Assets:

3) Securities Tokens

4) Central Bank Digital Currencies (CBDCs)

we explore all of the above, explain what they are and how they work, and clarify what regulations apply in the UK and EU for regulated digital assets

digital-asset-tokens-beyond-tokenization-2023.pdf link

digital-asset-tokens-beyond-tokenization-2023-1681050504836.pdf file

• Investors are turning to digital assets in growing numbers as new technologies and innovations expand market size and opportunity sets.

• This has implications for all stakeholders in the investment industry. New ecosystems are emerging in this space with new participants and infrastructure.

• Tokenisation has the power to be a true disrupter. It has the potential to transform existing asset lifecycles, accelerate product innovation and create customised, hyper personalised options for investors.

• For regulators, these developments are offering both challenges and opportunities. Ultimately, regulation will support the maturation of the industry.

• For asset servicers, this is a period of true transition. Asset servicers must act as digital conduits for the clients. They must be flexible, adaptable, and evolutionary in order to provide truly innovative and customised solutions.

• Partnership is key in this ecosystem. There is a significant opportunity for asset servicers to collaborate – from joint experimentation to co-creating new platform-based solutions.

digital-asset-tokens-infrastructure-report-2023.pdf link

digital-asset-tokens-infrastructure-report-2023.pdf file

digital-assets-crypto-conflict-2023-changes-silvan-andermatt.pdf url

digital-assets-crypto-conflict-2023-changes-silvan-andermatt.pdf link

Overview The Most Popular Cryptoassets Blockchain Activity Over Time The Origin of Donations Aid for Ukraine The Ill-fated Airdrop How Donations Were Spent Other Government Crypto Campaigns The United24 (U24) Global Initiative The Security Services of Ukraine The Ministry of Health of Ukraine Individual Regiments Non Governmental Organizations Military Donations Blockchain-based Charity Projects Humanitarian Aid Cyber and Intelligence Groups Journalism and News Channels

Required >> Cryptocurrencies and Decentralized Finance url   bis.org - by Igor Makarov and Antoinette Schoar ( MIT )

defi-crypto-regulation-bis-org-2023-work1061.pdf link

defi-crypto-regulation-bis-org-2023-work1061.pdf file

The paper provides an overview of cryptocurrencies and decentralized finance. The discussion lays out potential benefits and challenges of the new system and presents a comparison to the traditional system of financial intermediation. Our analysis highlights that while the DeFi architecture might have the potential to reduce transaction costs, similar to the traditional financial system, there are several layers where rents can accumulate due to endogenous constraints to competition. We show that the permissionless and pseudonymous design of DeFi generates challenges for enforcing tax compliance, anti-money laundering laws, and preventing financial malfeasance. We highlight ways to regulate the DeFi system which would preserve a majority of benefits of the underlying blockchain architecture but support accountability and regulatory compliance.

Required >> The Technology of Decentralized Finance (DeFi)  url - bis.org -by Raphael Auer et al

defi-crypto-technologies-bis-org-2023-work1066.pdf link

defi-crypto-technologies-bis-org-2023-work1066.pdf file

Decentralized Finance (DeFi) is a new financial paradigm that leverages distributed ledger technologies to offer services such as lending, investing, or exchanging cryptoassets without relying on a traditional centralized intermediary. A range of DeFi protocols implements these services as a suite of smart contracts, ie software programs that encode the logic of conventional financial operations. Instead of transacting with a counterparty, DeFi users thus interact with software programs that pool the resources of other DeFi users to maintain control over their funds. This paper provides a deep dive into the overall architecture, the technical primitives, and the financial functionalities of DeFi protocols

Crypto assets in DeFi space

DeFi protocol usage

DeFi protocols:

• Decentralized exchanges (DEXs) facilitate the exchange of cryptoassets.

• Lending protocols allow users to lend and borrow cryptoassets.

• Derivatives protocols are trading platforms where investors can issue and trade synthetic positions that track the value of underlying crypto- or real-world assets.

AMM based Exchange model

AMM-based decentralized exchange (DEX). Traders are DeFi users who exchange (swap) tokens, while Liquidity providers (LPs) deposit and withdraw liquidity in or from pools specific to each trading pair. Arbitrageurs rebalance pool compositions when imbalances emerge. Users holding governance tokens have voting rights and decision-making power and receive fees from users swapping tokens.

The core financial service of DEXs is to facilitate the swap of tokens. A swap is a simple token exchange that a Trader executes against a liquidity pool smart contract that holds reserves x and y of a token pair (e.g., Tokenx and Tokeny). For most AMMs, the swap pricing mechanism depends on invariant properties such as the conservation function that binds the pooled reserves of the two assets [5]. In the simplest case of a constant product function (CPF), the reserves are constrained by the equation f(x, y) = x · y = k. UniSwap’s V1 and V2 versions implement this bonding curve.17 The spot exchange rate is the token reserve ratio. When a swap is executed, a trader deposits an amount ∆x to the trading pair liquidity pool, and withdraws ∆y such that the condition (x + ∆x) · (y − ∆y) = k is met [6].

Thus, large enough swaps can cause slippage, ie, a difference between the spot and the realized price. Incentive mechanisms ensure price convergence: Arbitrageurs rebalance pools for profit by conducting trades opposite to the price slippage. Figure 5 illustrates the execution of a cyclic arbitrage strategy [119] across pools of the same DEX. An alternative strategy is to conduct arbitrage on the same trading pair across different DEXs [37].

In order to facilitate token swaps, liquidity pooling plays an essential role. DEXs exploit smart contract-based financial functions that enable the deposit and withdrawal of token pairs in or from the liquidity pool smart contracts. Any owner of a pair of tokens can become a Liquidity provider (LP) by locking them in a liquidity pool [30]. In turn, LP tokens are minted and supplied to the LP, proportionally to the amount of cryptoassets provided. Thus, LP tokens represent pool shares and grant a claim to withdraw a fraction of the underlying funds when they are burnt. In this sense, they are an example of asset tokenization, as they represent fractional ownership of the underlying pool. Deposits typically respect the ratio established by the market price18 to prevent the rise of arbitrage opportunities: a pure liquidity provision action does not modify the implied exchange rate but rather affects the parameter k [30].

Incentive mechanisms foster liquidity provision. As LPs take on price risk, they are rewarded with fees: for each swap, a fee is charged to the trader, and it is further divided between LP shareholders.19 Part of the fees can be retained in the protocol20 and managed by the governance, ie, users who hold UNI, the protocol’s governance token. Governance tokens’ ownership grants voting rights: owners can vote on design choices and propose strategic decisions such as modifying protocol parameters (slippage control, fees) or deciding how to use the protocol treasury. The UNI governance tokens were minted at the “Genesis”21 and distributed, according to a teams’ decision, for a limited time to the team itself and to all protocol users as a reward for participation. The practice of including governance tokens as a further incentive for protocol users, and especially for LPs, is called liquidity mining [50]. For the period where liquidity mining was active, governance tokens would appear in all user interactions with the protocol in Figure 5; we thus show their distribution as a separate interaction to increase readability and to underline that liquidity mining was active in Uniswap only for a short time window. Other DEXs, such as Sushiswap and Curve, exploit more systematically liquidity mining programs.

Pricing Mechanisms

DeFi Peer-to-Pool Model. Generalization of the interactions between economic actors and the DeFi protocols. The DeFi users that exploit the protocols by demanding liquidity pay a fee for accessing their services, while those that provide liquidity passively interact with them and earn an income for supplying liquidity. All other economic agents (Governance users, Keepers, Arbitrageurs) are moved by economic incentives to participate in the DeFi ecosystem.

Token Swaps Model

DeFi Composition Example. Illustration of two distinct transactions at the smart contract level. The colored rectangles indicate protocol-specific smart contracts, and the colors are used to distinguish those associated with different DeFi protocols (blue for 1inch and pink for UniSwap). To swap tokens, a user can interact with UniSwap’s router or 1inch’s router: both produce the same interaction with the UniSwap DEX Trading Pair contract. The top transaction is an example of DeFi composition.

Settlement for Asset Swap in Multi-chain environment

Multichain DeFi Protocols and Cross-chain Interoperability Section 3 focuses mostly on EVM-based DLTs. At the time of writing, Ethereum is still the most relevant blockchain for DeFi, with a Total Value Locked (TVL) exceeding 40 billion USD. However, many other blockchains provide similar DeFi services to those we described in the previous paragraphs. The most relevant are compatible with the Ethereum Virtual Machine.33 They facilitate code reusability, as the same project can easily be deployed on multiple chains: for instance, all the main 1inch smart contracts are deployed both on Ethereum and on BSC. Non-EVM compatible chains34 typically support fewer DeFi protocols because the entry barrier for migrating existing projects is higher. We can already point to some protocols deployed on these alternative blockchains,35 and we note that many of the protocols described in Section 5 are now moving in the direction of deploying their smart contracts in multiple DLTs (thus, we call them multichain protocols).

Challenges for Cross-Chain atomic transactions

solutions do not implement interoperability by default, but rather allow independent, heterogeneous blockchains to communicate. Other projects aim to provide interoperability instead as a built-in feature by implementing DLTs with a main chain and application-specific chains that can interact by design. In Polkadot [123], for instance, the Relay Chain plays a central role, and additional blockchains that interoperate by default, called parachains, can be created. Cosmos [77] implemented a similar design. It targets generic blockchain interoperability and is also based on a structure with a main blockchain, called the hub, and different zones that can interact with the main chain. We note that ThorChain is part of the Cosmos ecosystem. Cross-chain interoperability has become a crucial aspect and an additional layer of complexity in DeFi.

Token Economy Primer - 2022 - Andy Martin

BOA-tokenomics-v1

https://docs.google.com/document/d/1D4aBUoNB-0XB9l3RxAXn0c3jIlrTgnWqngibFT3iI8Q/edit?usp=sharing link

Tokenization of Real, Digital Assets is a new economy

https://www.nasdaq.com/articles/the-tokenization-of-the-world-starts-now

Where are we now?

With Web 3, DLT, Tokenization, Automation, AI, Cybersecurity offer real opportunities for improved solutions.

That said, the journey to better outcomes has many dependencies:

• smart regulation
• strong governance and compliance improving trust
• end-to-end security
• safe, guaranteed outcomes
• privacy support
• standards for interoperability and open innovation
• social consensus
• innovation vs disruption

Many Assumptions on net impacts that have not happened yet

Tokenization will develop out of a natural extension from this heightened data integrity on Web 3.0. The decentralized infrastructure at the heart of Web 3.0 will enable us to represent large swathes of society, the economy, and finance on distributed ledgers, while tracing their source of origin and guaranteeing their authenticity forever. A token economy representing real world assets will develop and thrive.

This will have the added benefit of creating increased liquidity through fractional or whole transactions, reduced costs, and increased settlement time. Ledgers will come to define the rules of asset transfer and value creation, providing a blueprint for the next generation of economic interactions.

Finance

Tokenization of traditional financial instruments, such as stocks and bonds, has the power to enhance inclusivity and liquidity across the traditional capital markets, bringing about improved practices that should improve transparency, increase market participation, and eliminate settlement risks. For example, bond tokenization is improving accessibility through maintaining an accurate ledger of fractional ownership, opening up the market to potentially millions of retail investors.

Potential Challenges

Candidate Solutions

a DAO proposal for Climate Action Business Ratings Research Services

https://github.com/opentaps/open-climate-investing/tree/main/dao

A DAO for creating open source climate investing analysis, including learning materials such as the book, industry specific climate analytical models (for example, energy, freight, airlines), and up to date analyses of individual companies' climate risk exposure.

• Provide open, inclusive approach to rating companies' climate risk exposure. "With enough eyeballs all bugs are shallow."
• Free for everybody: investors, government agencies, NGO's, and private individuals.
• Empower people everywhere with the knowledge and tools to understand what companies are doing (or not doing) about climate change.
• Create the broadest coverage of climate analysis for companies, following the Wikipedia, TripAdvisor, and Yelp models.

This DAO will only provide climate investing analysis. It is not a general investment analysis DAO. It does not make investments. It does not cover areas of Environmental, Social, Governance (ESG) or Corporate Social Responsibility (CSR) beyond climate. It provides analysis of the climate risk exposure for investing in companies, which could be used as a gauge of the companies' climate actions.

Business Model

In today's financial markets, both companies looking to raise capital ("issuers") and investors pay fees to third parties such as Standard & Poor's and Moody's to rate investments. Third-party ratings of companies' financial condition help objectively define what investments are appropriate for different group of investors. This in turn allows companies sell securities to investors based on such ratings.

The DAO's work similarly has value because it provides an objective, third-party rating for investors about the climate risks in companies. The DAO provides a way for investors and companies to pay for these ratings through the purchase of tokens, which are then allocated to the community as payment for its work.

Mechanism

This DAO will use a combination of non-fungible Reputation, fungible Activity tokens, and badges:

• Reputation tokens represent the holder's level of expertise and cannot be transferred, bought, or sold. All members will start with a small balance of Reputation tokens. They can earn more by taking some short online classes. Most importantly, members earn more Reputation tokens by creating or improving the quality of the project's work: Its models, analyses, and training materials. Reputation tokens gradually expire on their own, so inactive members eventually lose their standing.
• Activity tokens can be used to pay for work by community members and can be transferred. Members are given Activity tokens for performing work for the project, which could include building analytical models, analyzing companies, as well as writing code, maintaining content, and serving as ambassadors or community managers.
• Badges represent the holder's specializations and cannot be transferred. For example, they could represent specific areas of knowledge ("carbon markets", "climate accounting", "energy") or contribution ("investment analysis", "community building", "software development") Over time they could be used to make Reputation tokens more "specific", for example identifying experts in specific areas.

Work is performed collaboratively in the DAO. Each member contributes to a project and stakes a certain amount of Reputation tokens. Once the required number of Reputation tokens is staked, then the project can be judged. Only Reputation tokens can be used for staking on the validity of work for the project. Each member who contributed in a project receives an allocation of the Activity tokens in proportion to the Reputation tokens they staked in the project.

All work performed by the DAO is part of the open source project. Companies may engage the contributors "off project" to work on other jobs, and the contributors' Reputation tokens could help them get these jobs, but the results will not be certified by the DAO. Contributors will need to stay active in the project if they want to maintain their levels of Reputation, as existing Reputation tokens expire automatically.

The DAO will eventually have a group of Judges (similar to committers or maintainers of open source projects and editors at Wikipedia) who will decide on whether to accept contribution or work for the project based on purely technical merits. Once their work is accepted by the Judges, the members will receive Reputation tokens. To become a Judge, a member must have a very high number of Reputation tokens.

The DAO will also have a group of Administrators to manage the project. This group includes Judges and other members who are not technical experts (based on Reputations) but have made significant contributions based on their holdings of Activity tokens. Each member's standing in the Administrators is determined based on 2x their holdings of Reputation tokens and 1x their holdings of Activity tokens. A member can participate in votes of Administrators if they have at least 5% of this (2x Reputation + 1x Activity) tokens total. Administrators will vote on a range of issues such as approve a new release or changes to the project (mundane) to revoking tokens for bad behavior (extraordinary.) Mundane issues can be decided by a simple majority, and extraordinary issues will require super-majority (2/3) or more (80%?)

The DAO will have a Treasury which sells and redeems Activity tokens for stablecoins. Customers could buy Activity tokens to sponsor work in the project. Contributors could redeem Activity tokens to get cash payments for the work they did. The bid/ask spread of Activity tokens provides a permanent source of revenue to support the project.

Activity tokens will only pay for the work and not its outcome. There is no way to tie outcome to payment. This is to ensure objectivity and quality.

Social Solutions 

https://www.socialsolutions.com/blog/why-its-time-for-a-new-era-in-funding-social-good/

Sybal Social Goods Market

The Sybal Foundation provides an open market where participants invest in tokenized social good solutions ( projects and services ) and actively trade those investments managing their portfolios while supporting important social programs.  Non-profit organizations offer a wide selection of different social goods projects and services in the market participants can invest in and trade. 

Social good projects and services can apply for free market listings. 

This open system allows every data provider to monetize and tokenize their data, so that data itself could be a sustainable business model. Once I explain how data can be used more openly, can we then apply the tools of finance to it?

Communities Served

Investors

Step-by-step guide for Example

sample code block

Recommended Next Steps

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