Wednesday, March 30, 2022

Principles of tokenomics

This is an ongoing reflection on fundamental principles of tokenomics. 

We are document the main ideas on the OVN wiki, before we turn them into a post. 

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Many have called 2022 the year of the DAO. As this new form of organization becomes more popular people experiment with tokenomics, which are rules of issuance and (re)distribution of tokens that represent various things such as units of account, store of value, means of exchange, access rights, etc. 

A tokenomic model describes an economic game that is designed to incentivize and structure some type of collaborative activity and the maintenance and development of the infrastructure that allows that economic activity to take place. In this post we are going to elaborate on the fundamental principles that should constitute the basis of any tokenomics.

 

Principles

  1. Do not create artificial scarcity 
  2. Tax the fruit of activities, not the process itself 
  3. others to come...

 

Rationale

 This is where the rationale for every principle will be given.

 

See also

Current-see 

 

By AllOfUs

2 comments:

  1. Hi, I hope to communicate with humility and care.

    For #2:
    If we are going to use taxation (as a separate subject, I propose there is another, more direct way to fund public works), wouldn't it be better to tax the excessive use of finite resources (INPUTS) such as land and water instead of the results (OUTPUTS)?

    As Henry George discovered, if we tax the OUTPUTS, we punish improvements, and if we do not tax INPUTS, we encourage hoarding and speculation, causing sprawl and higher prices.

    From the perspective of a Computer Kernel it also makes sense to restrict each process to a limited amount of RAM and CPU to keep the other processes from 'starving', but there is no reason to reduce those allotments if a process is able to accomplish more than another process while remaining within those constraints.

    Sincerely,
    Patrick

    ReplyDelete
  2. Very interesting Patrick, tax the inputs.. Food for thought.

    ReplyDelete