Tokenomics 103: Evaluating Token Utility

If your goal is participating in a community, governance is a great perk for a token. 

 Can use this token as collateral to borrow against?

Are you supposed to hold this token as an investment? Or is it a token you’re supposed to spend?  Is some mechanism where you get paid for holding and using a token?

In this third part, I’m going to cover utility. Utility is a subsection of the Demand side of the tokenomics equation. Even if a token has a great supply model, it still needs a good reason to exist and for people to hold it. Without those, there will be no demand for it, and no one will buy or hold it.

So let’s dig into utility. We’re going to cover:

Spending vs HoldingCash flowsGovernanceCollateral