Tokenomics

Gayan Samarakoon
https://www.linkedin.com/in/g-samarakoon/
BlockChain VS Internet
 History of CryptoCurrencies

1982: David Chaum, e-Cash and DigiCash

1997: Adam Back, HashCash

1998: Wei Dai, B-Money

2008: Satoshi Nakamoto, Bitcoin

1998: Nick Szabo, Bit Gold

2004: Hal Finey, RPOW

 VC Investment in BlockChain Health

Andreessen
Horowitz
Blockchain
Capital
• BIS research estimates
– Current (2018)
Draper
Boost VC
• $176.8M
Associates

– By the end of 2025

Polychain
• $5.61B
Sequoia Capital
 BlockChain Eco-System & Tokens
Creating a token strategy.

- What is the application

- Is it a dApp?
- Is it a third party application communicating to
the networking layer or nodes via API calls?
- Has there been changes to the way the private
key issue and storage through the design?
- Is there enough talent to develop tokens?
- ERC20 is really easy.
- NEP-5 from NEO?

Public or Private protocol?

 Four types of Tokens

• Currency — A payment method between participants.

• Asset backed — A claim to an asset that is fungible and

tradable – SECURITY TOKEN
– E.g. – Tokenised building in Brooklyn – the
Brooklyn project by consensys

• Grease the Wheels — The token is needed to power

the blockchain – Incentivise NODES to keep consensus
going.

• Equity — A “stake” or ownership in the company.

– E.g. ICO replacing the IPO.
– SECURITY TOKEN
Sample ERC-20 token code
 Example Token strategy

Strategy #1 – Single Utility Token Strategy #2 – Two Tokens – Utility and Security
• dApp
• dApp
• Security Token offer for company shares
• Simple ERC-20 tokens (ETH)
– Must comply with securities acts within each
• Issue as many for use within the dApp – i.e. jurisdiction. E.g. ASIC
Utility function – Security Token offer for company shares

• Do an ICO • Utility Token offer to use within the dApp

• Make a tonne of cash and hide in the – Tokenomics become important.
• E.g. a loyalty program structure with rewards,
Bahamas
redemptions and purchases within the dApp
Token Classification Framework: Untitled-Inc
Token Classification Framework: Example
You could call
Augur’s REP a

Non-native-
protocol-
Network-
Network-value-
Work token

likely classify as a
Utility Token.
 Things to consider when tokenising your dApp
• Does the dApp need a token to function?
• Does the Blockchain require tokens? – i.e Public vs Private
• What is your token strategy?
• Have you created a tokenomics document? (example to follow)
• Consider legal ramifications based on jurisdictions e.g. Token classification
& Compliance
• Hire the best developer you can possibly buy
• Lots of nightmare stories with coding errors in Tokens. Critical for the success of your dApp

Next step: The ICO

• PR, Marketing, Pre-ICO raising via private pools, Exchange listing negotiations, Market
making from liquidity providers, in-house trading desk, on going compliance
etc…………………
 Tokenomics Doc example: E-Nome

Tokenomics = Economics+Your Token

• E-Nome Tokenomics summary

• E-Nome system Token flow and
Data Transfer
 Tokenomics Doc example: E-Nome

• E-Nome Token structure – Dual token: A Tokens (Nomes -

CryptoCurrency) and B Tokens (Health Points – data
collection)
• Conversion of B Tokens to A Tokens via smart contract in the
incentivization process
• Nome Escrow for creating in-house loyalty programs and
converting A tokens back to B tokens
• Token allocation and availability breakdown
ICO Analysis framework: Untitled-Inc
 What are the Tech Giants upto?
Will they become competitors or complementors?

Amazon – Healthcare and Blockchain as a service platform

Google Health – Largest Investor in to Blockchain projects overall
Apple Healthcare – Filed for patents in December 2017 for Blockchain timestamp verification system
IBM – Watson and Involvement in Hyperledger
Tencent – Blockchain as a Service (BaaS)
AliBaba – Heavy involvement in Blockchain application development and protocol development
Microsoft – Azure Blockchain Workbench (BaaS)
Please get in touch
linkedin.com/in/g-samarakoon/