Tokenomics

It is a token-centric method to control an ecosystem, a group of agents to produce a specific set of behavior that increases the probability of a specific outcome. Tokens represent access and rights and are implemented on a blockchain, using a smart contract. The idea is to have a pre-set logic that ties rewards to actions. It uses game theory.

History

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.

Problems

No everything can be quantified or tokenized

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Gaming the game

Once activities and outcomes can be measured, evaluated and tracked, i.e. once we adopt a formal quantitative system to guide activity, at the same time we create the possibility for gaming, i.e. for cheating.

Crowding out

Once we associate a clear benefit to an action the action may become less appealing for potential participants.