The word “tokenomics” (token economics) can refer to either the design of economic systems based on blockchain technology or the study thereof. The ‘study of tokenomics’ is riveting because it reveals that blockchain technology is only just beginning to change the way we organise resources and people to create and exchange value within society. Some of the most fundamental rules governing society are up for grabs and open for disruptive redefinition by tokenomically savvy startups and institutions. Tokenomics can even be used to design or redesign entire economic systems from the ground up.
However, this article introduces tokenomic services provided by an ICO platform and leaves the ‘study’ of tokenomics to the classrooms and books.
ICO and STO Tokenomics
Correct tokenomic design can easily make the difference between a successful ICO and one that fails to raise the amount necessary to set the network on a trajectory where organic growth can take root. Most ICOs fail to realise this. ICO Malta’s tokenomic design service creates an optimised token ecosystem for your ICO. We provide the consultation, analysis, and tools needed to ensure that your project’s tokenomic design is robust and comprehensive, allowing it not just to launch, but to flourish.
There are two primary categories of tokens: the utility token issued in an initial coin offering on a decentralised blockchain network, and the security token issued in a security token offering on a more or less centralised blockchain network. In both cases, a well-designed token offering bootstraps the economy of the network to fund its development.
Good tokenomic design is primarily a matter of optimally aligning the incentives of all network members to turn the networked economy into something more like a community or ecosystem, instead of a business or institution. The token aligns the interests of individual token holders with the interests of the whole network. As the organisation’s value increases, that increase in value does not get sucked up by management and shareholders. It instead gets distributed across the network, accruing to all of those that hold the token.
Main areas of tokenomic design
- Token Design and Function: Your token needs to work. We make sure that all internal operations of your token platform function properly and meet compliance standards.
- Token Utility: clients often have misconceptions about the utility of their token in the context of its use case. ICO Malta ensures that your token’s utility is worthy of a token ecosystem.
- Token Utilisation: ICO Launch Malta works with founders and advisors to determine how achievable fundraising goals are considering the expected degree of target market penetration. If the reasonable valuation of a project’s token utilisation potential is €25 million, for example, we make sure that you don’t mistakenly guess or expect to raise €5 million or attempt (and fail) to raise €50 million.
- Token Distribution: We ensure that the proceeds structure for your token offering has attractive investor terms and liquidity criteria.
ICOs and security token offerings are the first examples of new token networks already displacing one area of the traditional financial system, early stage venture capital, in a substantial way. These capital raise vehicles tap into a new capacity of project financing first seen with crowdfunding. With ICOs, anyone in the world can purchase a piece of the value of the utility of a network. With STOs, accredited investors from around the globe can purchase an ownership stake in a venture raise, revenue stream, or another asset that is ordinarily difficult to equitize.
Whether your project launches with an ICO or an STO, ICO Malta stands ready to help you fully extract all of the tokenomic potential and value lying within your project.