The Tokenomics phenomenon

By Arturo Alejandro Canseco,
Legal & fintech associate at Ramos Ripoll Schuster firm
Payments – Fintech Foreign Advisor at Etisalat, Mexico

 

Money and transactions are part from our future, what a huge moment that we are living many of projects based on Blockchain are popping up right now around of the world with amazing projects, claiming what project will be the next tool of meaning of innovation. Projects that perhaps will save our lives in the future.

Money is used everywhere. We have a revolutionary concept Tokens & more tokens,International corporations transact in it, pay products and services without cash in many countries with the arrive of the Central Bank Digital Currencies (“CBDC”), a new science, that we know call monetary policy, has developed around this process.

Cryptoassets have changed this. 

Tokenomics is here!

 

What is Tokenomics?

This is not new, but we are experimenting with this incredible phenomenon, the idea of the token economy was propounded first by the Harvard psychologist B.F Skinner in 1972. He believed a token economic model could control behavior. Giving some unit of recognizable value would incentivize positive actions and vice versa.

We understand “Tokenomics” as the economy of tokens this concept has as its fundament try to convince users or project investors that token of the project derived itself could build a sustainable economy. In other words, Tokenomics essentially takes what central banks use as monetary policy and apply it in blockchain networks.

Tokenomics is the science of the token economy, allow the creation of sustainable economic systems in that sense the blockchain technology there allowing that these ecosystems could develop with different use cases. It covers all aspects involving a coin´s creation management, and sometimes removal from a network. The ecosystem where everything is hanging up by different interactions with these tokens in this manner the ecosystem is built exclusively by tokens that represents real assets.

Those assets could be whatever you want a book, a song, a computer, a pen inclusively financial assets the truly power of the tokenomics is they allow descentralized their control. Blockchain technology enable projects to crate microeconomies. To become self-sustaining, they need to figure out how tokens should work within their ecosystem.

 

Tokenomics in the Financial Sector

Nowadays, a lot of projects are popping up within the blockchain industry, claiming to be the next big innovation that will change the world. In reality, only a minority is really disruptive. Because of the innovative character of this technology, the number of used cases is unlimited: tracking ownership, provenance of documents, supply chain management, insurance, financial instruments and so on.

Nowadays, a lot of projects are popping up within the blockchain industry, claiming to be the next big innovation that will change the world. In reality, only a minority is really disruptive. Because of the innovative character of this technology, the number of used cases is unlimited: tracking ownership, provenance of documents, supply chain management, insurance and so on.

As the last words nowadays, a lot of projects are popping up within the blockchain industry, claiming to be the next big innovation that will change the world. In reality, only a minority is really disruptive. Because of the innovative character of this technology, the number of used cases is unlimited: tracking ownership, provenance of documents, supply chain management, insurance and so on.

Resources:

Tokenomics: The Crypto Shift of Blockchains, ICOs, and Tokens October, Sean Au, Thomas Power, 2018

Tokenomics: Dynamic Adoption and Valuation Lin William Cong, Ye Li, and Neng Wang NBER Working Paper No. 27222,  2020

Arturo Alejandro Canseco
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