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Economic Engineering for Decentralized Platforms
Everyone knows that web3 platforms are decentralized…but what really enables decentralization…tokens…
The distribution of value and control in the decentralized ecosystem is primarily driven by various kinds of tokens.
Tokens are often touted as investment opportunities but the primary role of tokens on web3 platforms is to capture the value generated by the platforms and distribute value and control among the network participants to incentivize them so that they behave in a way that contributes to the smooth functioning and growth of the ecosystem itself.
Now, Token engineering is the discipline that deals with designing token systems to achieve the product and economic goals for which the platform is being built.
OK. this can be a lot to take….let us simplify that.
Once deployed decentralized platforms act as self-sovereign systems i.e. cannot be controlled from outside. Now, tokens incentivize platform participants so that they behave in a way platform builders intended them to and ultimately contribute towards the growth of the platform.
Token Engineering is not a simple subject to learn - It is an interdisciplinary subject that borrows concepts from economics, system design, behavioral science, etc.
So, mastering Token Engineering is neither easy nor can be done quickly. But understanding Token Engineering is absolutely vital for designing well-functioning web3 platforms.
Now, this course will introduce you to different facets of token engineering so that you understand the basics and create a framework for future learning. We will also try to design a token model for a hypothetical decentralized application.
So, let us get started.