Token Economics Model Creation and Security

Lisa J. Y. Tan
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Lisa J. Y. Tan: Economics Design

Chapter Chapter 5 in A Comprehensive Guide for Web3 Security, 2023, pp 103-117 from Springer

Abstract: Abstract This chapter offers a comprehensive exploration of token economics, its underlying principles, and the security challenges associated with it. The chapter begins by differentiating tokens from the economy and establishing that the design of token economies is not a novel concept. It then delves into the importance of token economics and the associated risks. The chapter further defines token economics and examines the interplay between Web3 security and token economics, touching upon Ponzinomics. It compares Web3 with existing economic structures and explicates the components of token economics. The Economics Design Framework is introduced, focusing on market design, mechanism design, and token design as vital elements in delivering real value to users and striking a balance between monetary policies and the value creation cycle. Subsequently, the chapter discusses token economics stress tests and economics risk monitoring and addresses cybersecurity risks in the context of token economics. The chapter concludes with a summary of the key points and an overview of ongoing research in the field of tokenomics.

Keywords: Token economics; Ponzinomics; Economics design framework; Market design; Mechanism design; Token design; Token economics stress tests; Economics risk monitoring; Cybersecurity risks in tokenomics; Web3 security; Incentive mechanisms (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/978-3-031-39288-7_5

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