In the public blockchain space, no platform has yet reached that point. Even Bitcoin, the first blockchain platform, is still in its early growth stages, and is heavily subsidized: for example, in the past 3 months miners gained about 3, BTC from mining fees and , BTC from block rewards. In other words, block rewards paid for Block rewards are simply subsidies transferred from the pockets of early purchasers whose BTC is worth slightly less due to inflation to the pockets of miners. The purchasers, of course, are happy to subsidize Bitcoin use, because they expect it to enable wider adoption of the protocol and increased demand for the BTC they hold.

Long-term Strategy It may sound as if creating an economic model that works during takeoff is the harder part of the problem: it involves estimating the future value of assets, including intangible assets such as experience, brand, seniority and so on. But in fact, takeoff models have been tried in the hundreds, and by observing which blockchain projects created a high-quality community of operators we can assess what works in the existing economic models.

The long-term sustainability of an economic model is, on the other hand, mostly uncharted territory. There are, though, two types of stakeholders we can profile: the token holders and the platform users app developers. Who are the token holders and what do they want? Token holders in platforms that are taking off are a very diverse group that is quite hard to define. Naturally, those holding the token, are doing so only because they intend to use it in the future, or used it in the past.

What platform users want The needs of the app developers are actually easy to predict. The watermark for the platform is cloud: centralized apps using cloud platforms have the best tools to create a great product in predictably low costs. Decentralized apps that compete with them must be able to offer similar quality at roughly the same costs.

The economics of cloud services is aimed towards the exact opposite: in almost all services, users expect to pay less as they grow, and for all costs to decline over time — in proportion to ever-declining hardware costs. If you weren't there for the initial coin offering era , here's an oversimplification: Folks were raising money to build services that would be open source and charge no platform fees to their users.

They did this by selling tokens, which weren't stock in the company but typically some kind of access enabler for some part of the new service. There are a lot of forms tokens take, but here's the simplest: Most of these ICO startups created some kind of marketplace, enabling a connection between people who needed a service and those who could provide it. While the marketplace itself didn't charge fees, it would enable transactions only with the native token.

The ICO era may have passed, but what clicked for me then is still relevant now. Take that initial idea and add complexity and innovation and that gives you the plethora of companies created in this vein up through today. In truth, basically no one uses the model above, but the idea started there. So this part about not charging fees for building these marketplaces kept bugging me. How would the creators make money? I think it clicked while I was talking to a founder making a decentralized auction site, like eBay.

The big selling point was that the protocol would allow folks to host all these items for sale and it wouldn't charge anyone any money for them to host the listing or for the protocol to manage bids on it. Read more: Why the World Still Needs Uncensorable Marketplaces Marc Hochstein Obviously, this is a very nice deal for users, but how the heck did it make sense for this team to spend a lot of time and money to build it?

That was what was so clever about the ICO model, though. It created an incentive to build something valuable that the creators could eventually walk away from and let run itself.

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How can a user buy MMM? Purchasing the coin is rather simple. However, it is important to note that the token is and not a registered digital currency and it is necessary for the users to be compliance with regional regulatory laws before stepping in to buy MMM.

All a user needs to do is create a digital currency wallet, similar to that of a secure Metamask wallet. The tokens can be purchased on Metamask directly, or via other cryptocurrency platforms such as Coinbase, BlockFi. Following this, the user will now have to send them to their Metamask wallet. Lastly, users are require to connect to decentralized exchange Uniswap and swap for MultiMillion and trade. The prolific developing team behind the MMM coin now aims to grow its community with the help of marketing fund as well as social media [Twitter and Youtube] promotions.

Its ambitious roadmap, however, does not end there. The team also plans to revamp the offical MultiMillion coin website and release the whitepaper. The ecosystem also plans ro rollout Binance bridge. It also plans to acheive top-tier exchange listings and Certik Audit[s] for its thriving decentralized ecosystem. It is still very much in its infancy. Hence, a predicting a decisive trajectory for its price might seem difficult now. As prominent cryptocurrency platforms continue to enbrabce the decentralized coin, it would not be surprising to see MMM rally higher.

Its increased adoption has spurred significant growth. Closing Thoughts As the decentralization movement continues to solidify its position in the industry, the demand for decentralized ecosystem to cater to the growing need will also increase.

Before digging deeper into this fundamental analysis, I will introduce the concept of a token economy. Understanding this concept well will not only allow builders to create sustainable projects and token economies, but also help investors develop a framework for assessing the intrinsic value of projects in the market. The Token Economy The global economy can be broken down into smaller sub-economies, such as countries, organizations, or groups of individuals.

Whenever someone gets paid in an economy, someone is providing payment in exchange for goods or services. An economy also tends to have its own rules and constraints to help encourage cooperative and mutually beneficial behavior within the ecosystem. The same principle applies to web-based and blockchain economies. The productivity and reliability of an economy determines how valuable the currency of that economy is relatively compared to others.

According to Modern Monetary Theory, this is where governments and central banks intervene and leverage monetary policy to optimize the balance of supply and demand. Monetary Policy, Source Governments tend to change policies to encourage buyers to spend more when there is a lack of demand, raising the productivity of the whole economy to avoid a long run supply shortage. The same principle also applies to crypto projects and tech startups. By paying high salaries for developers to build scalable products, tech startups are also spending a lot of money to fuel the demand growth.

With traditional tech or web 2. The companies that do this effectively are able to survive, and have a chance to become the top tech companies in the world. Others will fail after ineffectively burning all the cash they raised from investors. While most Web 3 startups are using the same growth model, there are differences in how cash is leveraged to stimulate the economy.

Stimulus takes the specific form of token issuance, with governance teams or the protocols using token policy to encourage desired behaviors. If there is a person selling something, there has to be a buyer on the other side of the trade. Therefore, there has to be more demand for the tokens than the selling supply to keep the price of the tokens increasing in the long run. Fundamental Token Demand Take Ethereum as an example. The chain is designed to incentivize people to download server software and run nodes to help secure the network, provided they can meet some requirements such as possessing an expensive GPU PoW or 32 ETH to stake PoS.

After successfully validating transactions and keeping the network secured, these validators receive token rewards that they can either hold or sell. Once the network becomes safer, more people will want to transact on the network, thus increasing the value of block space and demand for the network. Of course, there are diminishing returns on the increase in network security relative to staking demand.

Therefore, the governance teams and the community should track this trajectory to know when it could be better to allocate more resources to other parts of the economy. Paying for the Cost of Business The U. S economy is driven by the Federal Reserve and U. S government deploying monetary and fiscal policy. Monetary policy helps control the money supply flow in the market, and fiscal policy helps distribute the additional printed money to different participants in the economy.

Whenever the money supply increases faster than the demand for goods and services produced in the economy, that money will lose some of its purchasing power, a. The same concept applies to the token economy. Since increasing the floating supply causes tokens to lose their purchasing power, those driving token policy should be very cautious about how much supply inflation occurs over time.

They also need to be thoughtful about distributing that number of tokens effectively, incentivizing the target participants to contribute positive value without engaging in free-rider behavior that saps value. Subsidizing Security, at the cost of Inflation With the successes and growing popularity of Proof of Stake protocols, hundreds of different projects in the market have tried to adopt a staking mechanism. Some projects fueled their staking yields with large emission rates to attract token stakers.

Those staking yields were clearly unsustainable.

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Thanks to its deflationary nature, MultiMillion can be used as a store of value as well as a means of transaction. Hence, its value increases as it become more and more scarce. A decentralized token that is validated by millions of devices worldwide has witnessed a staunching growth with respect to usage as well as acceptance as a form of digital currency.

How can a user buy MMM? Purchasing the coin is rather simple. However, it is important to note that the token is and not a registered digital currency and it is necessary for the users to be compliance with regional regulatory laws before stepping in to buy MMM.

All a user needs to do is create a digital currency wallet, similar to that of a secure Metamask wallet. The tokens can be purchased on Metamask directly, or via other cryptocurrency platforms such as Coinbase, BlockFi. Following this, the user will now have to send them to their Metamask wallet. Lastly, users are require to connect to decentralized exchange Uniswap and swap for MultiMillion and trade.

The prolific developing team behind the MMM coin now aims to grow its community with the help of marketing fund as well as social media [Twitter and Youtube] promotions. Its ambitious roadmap, however, does not end there. The team also plans to revamp the offical MultiMillion coin website and release the whitepaper. The ecosystem also plans ro rollout Binance bridge. It also plans to acheive top-tier exchange listings and Certik Audit[s] for its thriving decentralized ecosystem.

It is still very much in its infancy. Hence, a predicting a decisive trajectory for its price might seem difficult now. The productivity and reliability of an economy determines how valuable the currency of that economy is relatively compared to others. According to Modern Monetary Theory, this is where governments and central banks intervene and leverage monetary policy to optimize the balance of supply and demand. Monetary Policy, Source Governments tend to change policies to encourage buyers to spend more when there is a lack of demand, raising the productivity of the whole economy to avoid a long run supply shortage.

The same principle also applies to crypto projects and tech startups. By paying high salaries for developers to build scalable products, tech startups are also spending a lot of money to fuel the demand growth. With traditional tech or web 2. The companies that do this effectively are able to survive, and have a chance to become the top tech companies in the world.

Others will fail after ineffectively burning all the cash they raised from investors. While most Web 3 startups are using the same growth model, there are differences in how cash is leveraged to stimulate the economy.

Stimulus takes the specific form of token issuance, with governance teams or the protocols using token policy to encourage desired behaviors. If there is a person selling something, there has to be a buyer on the other side of the trade. Therefore, there has to be more demand for the tokens than the selling supply to keep the price of the tokens increasing in the long run.

Fundamental Token Demand Take Ethereum as an example. The chain is designed to incentivize people to download server software and run nodes to help secure the network, provided they can meet some requirements such as possessing an expensive GPU PoW or 32 ETH to stake PoS. After successfully validating transactions and keeping the network secured, these validators receive token rewards that they can either hold or sell.

Once the network becomes safer, more people will want to transact on the network, thus increasing the value of block space and demand for the network. Of course, there are diminishing returns on the increase in network security relative to staking demand. Therefore, the governance teams and the community should track this trajectory to know when it could be better to allocate more resources to other parts of the economy.

Paying for the Cost of Business The U. S economy is driven by the Federal Reserve and U. S government deploying monetary and fiscal policy. Monetary policy helps control the money supply flow in the market, and fiscal policy helps distribute the additional printed money to different participants in the economy. Whenever the money supply increases faster than the demand for goods and services produced in the economy, that money will lose some of its purchasing power, a.

The same concept applies to the token economy. Since increasing the floating supply causes tokens to lose their purchasing power, those driving token policy should be very cautious about how much supply inflation occurs over time. They also need to be thoughtful about distributing that number of tokens effectively, incentivizing the target participants to contribute positive value without engaging in free-rider behavior that saps value.

Subsidizing Security, at the cost of Inflation With the successes and growing popularity of Proof of Stake protocols, hundreds of different projects in the market have tried to adopt a staking mechanism. Some projects fueled their staking yields with large emission rates to attract token stakers.

Those staking yields were clearly unsustainable. These yields targeted one, and only one, objective: incentivize people not to sell their tokens. Most countries in the world allocate a budget for military and national defense to enhance the safety of their territory. When a nation becomes more stable and safer, people are also more comfortable conducting economic activities within that economy to create goods and services.

The national security expense is often funded by taxes and inflation the money printed out by the FED, and then given to the government as national debt. Two sources currently support these rewards: 1. Block Rewards or Staking Rewards excluding transaction fees , which are freshly minted or released from the staking pool as security incentives subsidized.

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