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Economics Introduction


In the economy of blockchain networks, a lot revolves around tokens. In a public permissioned blockchain, it depends on the respective use case whether tokens in whatever form are useful at all. For some use cases, tokens are simply not needed.


When dealing with the economics of blockchain networks, it is particularly important to be clear about which use cases you want to map. Many mechanisms are very important and incredibly useful in public permissionless blockchains. However, since we only have limited and trusted users of the infrastructure through the public permissioned blockchain, some concepts do not make sense at first glance.

However, incentives and fees make sense as these mechanisms can be used to finance the infrastructure and ensure that processes run smoothly as they can also be made attractive through incentives. In addition, fees prevent unnecessary actions or spam-like executions. They can also be used to create value that is attractive to the participating members and thus ensure long-term continuity.


The following sections will focus on the topics of:

  • Incentives or Fees
  • Token Economy

Internal references and dependencies

Lists of internal references and dependencies

Bibliography of selected references

Beck, Roman, Jacob Stenum Czepluch, Nikolaj Lollike, and Simon Malone. 2016. ‘BLOCKCHAIN – THE GATEWAY TO TRUST-FREE CRYPTOGRAPHIC TRANSACTIONS’. Research Papers, May.

Campbell-Verduyn, Malcolm, ed. n.d. Bitcoin and Beyond: Cryptocurrencies, Blockchains, and Global Governance. Accessed 30 April 2021.

Chen, Long, Lin William Cong, and Yizhou Xiao. 2020. ‘A Brief Introduction to Blockchain Economics’. In Information for Efficient Decision Making, 1–40. WORLD SCIENTIFIC.

Chiu, Jonathan, and Thorsten Koeppl. 2019. ‘Incentive Compatibility on the Blockchain’. In Social Design: Essays in Memory of Leonid Hurwicz, edited by Walter Trockel, 323–35.

Studies in Economic Design. Cham: Springer International Publishing.

‘CPSS-IOSCO Principles for Financial Market Infrastructures’. 2018. In Wikipedia.

Fridgen, Gilbert, Ferdinand Regner, André Schweizer, and Nils Urbach. 2018. ‘DON’T SLIP ON THE ICO – A TAXONOMY FOR A BLOCKCHAIN-ENABLED FORM OF CROWDFUNDING’. Research Papers, November.

Glaser, Florian, and Luis Bezzenberger. 2015. ‘Beyond Cryptocurrencies - A Taxonomy of Decentralized Consensus Systems’. SSRN Scholarly Paper ID 2605803. Rochester, NY: Social Science Research Network.

Kazan, Erol, Chee-Wee Tan, and Eric T. K. Lim. 2014. Towards a Framework of Digital Platform Disruption: A Comparative Study of Centralized & Decentralized Digital Payment Providers. ACIS.

Kim, Henry M., Marek Laskowski, Michael Zargham, Hjalmar Turesson, Matthew Barlin, and Danil Kabanov. 2021. ‘Token Economics in Real Life: Cryptocurrency and Incentives Design for Insolar’s Blockchain Network’. Computer 54 (1): 70–80.

Kim, Moon Soo, and Jee Yong Chung. 2019. ‘Sustainable Growth and Token Economy Design: The Case of Steemit’. Sustainability 11 (1): 167.

Malinova, Katya, and Andreas Park. 2018. ‘Tokenomics: When Tokens Beat Equity’. SSRN Scholarly Paper ID 3286825. Rochester, NY: Social Science Research Network. Park Malinova - Tokenomics.pdf.

Mengelkamp, Esther, Johannes Gärttner, Kerstin Rock, Scott Kessler, Lawrence Orsini, and Christof Weinhardt. 2018. ‘Designing Microgrid Energy Markets: A Case Study: The Brooklyn Microgrid’. Applied Energy 210 (January): 870–80.

Nakamoto, Satoshi. 2019. ‘Bitcoin: A Peer-to-Peer Electronic Cash System’. Manubot. Manubot.

Notheisen, Benedikt, Jacob Benjamin Cholewa, and Arun Prasad Shanmugam. 2017. ‘Trading Real-World Assets on Blockchain’. Business & Information Systems Engineering 59 (6): 425–40.

Oliveira, Luis, Liudmila Zavolokina, Ingrid Bauer, and Gerhard Schwabe. 2018. ‘To Token or Not to Token: Tools for Understanding Blockchain Tokens’. In Oliveira, Luis; Zavolokina, Liudmila; Bauer, Ingrid; Schwabe, Gerhard (2018). To Token or Not to Token: Tools for Understanding Blockchain Tokens. In: International Conference of Information Systems (ICIS 2018), San Francisco, USA, 12 Dezember 2018 - 16 Dezember 2018. San Francisco, USA: s.n.

Peters, Gareth, Efstathios Panayi, and Ariane Chapelle. 2015. ‘Trends in Cryptocurrencies and Blockchain Technologies: A Monetary Theory and Regulation Perspective’. SSRN Scholarly Paper ID 3084011. Rochester, NY: Social Science Research Network.

Salviotti, Gianluca, Leonardo Maria De Rossi, and Nico Abbatemarco. 2018. ‘A Structured Framework to Assess the Business Application Landscape of Blockchain Technologies.’ In .

Tan, Lisa. 2019. ‘Token Economics Framework’. SSRN Scholarly Paper ID 3381452. Rochester, NY: Social Science Research Network.

Contributing authors: David Maas Status of this document: work in progress
Last day modified: 2021-05-26