The first book in the expanded Token Economy Series delves into the interplay of money, NFTs, and decentralized finance (DeFi). It explores how tokens can motivate individuals within autonomous groups to work towards shared objectives, focusing on decentralized autonomous organizations (DAOs) and purpose-driven tokens. The series aims to provide a comprehensive understanding of the technical and political dimensions of blockchain networks, with the next installment on Web3 infrastructure set for release in 2024. The previous edition remains available for those wanting to familiarize themselves with the foundational concepts.
Focusing on the institutional impact of blockchain networks, this book delves into DAOs and purpose-driven tokens, blending theoretical insights with practical applications. It aims to foster a common understanding of Web3-based institutions, while exploring the evolution of money and finance in the context of tokenization. This edition is part of a trilogy, with companion volumes addressing the history of finance and the technical and political dimensions of blockchain infrastructure, providing a comprehensive overview of the changing financial landscape.
This book caters to an interdisciplinary audience, including academics and practitioners, and serves as an excellent primer on technology and token use cases, making it suitable as a textbook for students. It is blockchain/DLT agnostic and focuses on the technology basics from a token perspective. The text introduces a token taxonomy from economic and governance angles and explores various use cases, such as stable tokens, asset tokens, social media tokens (like Steemit), attention tokens (BAT), and purpose-driven tokens like CO2 tokens. It also discusses token sales, exchanges, and atomic swaps.
With blockchains and smart contracts simplifying token creation, tokens can represent diverse assets or rights, from gold and diamonds to concert tickets. They can incentivize social media contributions or encourage CO2 emission reductions. Despite the ease of creating tokens within public blockchain infrastructures, understanding their applications remains unclear. The book emphasizes the term "token" over "cryptocurrency," clarifying that many tokens were not designed to serve as currencies. It thoroughly analyzes the role of money as a medium of exchange and provides insights into the mechanisms and socio-economic implications of tokens, along with in-depth examinations of specific use cases like Basic Attention Token, Steemit, and Token Curated Registries.
