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Tokenomics by Thomas Power, Sean Au

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Chapter 5. The Need for a Token

Blockchain and smart contract technologies have unleashed the ability to create all sorts of tokens, as highlighted in the previous chapter, including an increasing number of applications and tools to help to make the token creation process easier.

However, the most important question before we all rush out and start tokenizing the world is: what is the purpose of the token? Is it to access an application's service or product? Is it to incentivize users to grow an application or platform network? Is it, perhaps, to make an illiquid asset liquid? Is it purely to raise capital? Quite often, the answer is that a token starts out having one purpose and then changes to having a purpose that is a combination of all of ...

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