Lockdrop + LBA: The Future of Tokenomics?

Incentive DesignTokenomics are a tool for aligning the incentives of participants in a network. It is extremely important to identify what behavior is required from each participant in an ecosystem in order for the network to achieve a virtuous cycle. Equally important is designing suitable token incentives that encourage the desired market behavio... See more

Early versions of token distributions have led to unsustainable dynamics wherein speculators are rewarded instead of those who are adding consistent value to networks through actual usage.

So if I step back, a good consumer token model in my mind:

• Releases a token early, recognizes the end state is entirely unclear, and maintains optionality on how it’ll evolve in future


• Has mechanics to distribute tokens over a long time frame to users / participants that are creating value


• Captures value from the speculation layer and funnels it into

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The most important takehome is that tokens are not equity, but are more similar to paid API keys. Nevertheless, they may represent a >1000X improvement in the time-to-liquidity and a >100X improvement in the size of the buyer base relative to traditional means for US technology financing — like a Kickstarter on steroids. This in turn opens up... See more

That said, the high frequency of airdrops has also created a culture in crypto where many prospective contributors join a community with the sole aim of maximizing their chances of getting airdropped tokens in the future — regardless of how invested they are in the community as a whole, or how slim the chances of these airdrops happening actually a... See more