Blockchain Incentive Structures: What they are and why they matter

An incentive is any design element of a system that influences the behavior of system participants by changing the relative costs and benefits of choices those participants may make.

From miner rewards, to transaction fee-setting mechanisms, to token curated registries, to prediction markets, incentives are everywhere in blockchain platforms.

This example demonstrates that every choice made by a founding team will shape the incentives of the users of their platform, and therefore must be viewed through the lens of incentive design. Design elements as simple as providing helpful information about options (or not) and making it easy for users to find and navigate toward their best choice ... See more