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DAO as aToken Economy
Source, Andy Martin, IBM
Front end
Back end
Governance
web3 wallets
Metaverse
blockchain
DAO
Security
/ NFT
Value
Utility
SSI
State Machine forTokens
• Ownership
• Who did what, when?
Smart contracts
• DAO
• Apps
• DeFi
Tokens
Supply Distribute
DeFi Marketplace
Service layer replaces commercial
banks to create credit
Smart contract
DAO: Aggregate (small)
investors
Smart contract
matches finance to demand
Smart contract
Pays investor
Logistics
Manufacture
Smart contract
releases finance from escrow
Digital
liquidity
$
Trade Finance & ST debt Smart contract Token, Stable Coin or digital asset
Key
$
$
DAO is a Network Business
Source, Andy Martin, IBM
Token + DeFi + DAO = industry reinvention
Go to market
• Network effects
Products
• Revenue & value
Tokenomics
• Incentives / DeFi
Innovation Platform Governance
• As a network
• Network, market or
industry
• DAO
• Zone of
sovereignty/rules
• Buy & sell data
• Apps & wallets earn
value
• Fees for activity
• Professional &
foundation services
• Store value in the
market token(s)
• Skill & reputation
• Win-win-win
• Behaviours
• Composability of
funding protocols
• New funding / reserve
model
Source, Andy Martin, IBM
Token Economy governance is managed by the
token holder in a fair and democratic way
Apps
DAO
Wallet / Metaverse
Ledgers
Source, Andy Martin, IBM
Tokens
Users owns, that is manages, access to their data
and the process to update its state
Manages private keys where ownership of 100’s of
tokens can be accessed & atomic swaps initiated
Manages business model of value exchange
(atomic swaps) of tokens for ownership or access
for tokens for value
Tokens are used for fund raising and decision
making by token holders as the digital asset value
is managed for collective win:win:win outcomes
Tokens are used as rewards for helpful behaviour in
providing the ledger updates & platform resources
Governance model levels
Governance
Apps.
•Trading
•Regulation
•Payments
•Global trade
•Trade finance
•Provenance
•Patient ID
•Clinical trials
•Supply chain
Business
models
Business
networks
DAO
Wallet/
Metaverse
Ownership
Security
/ NFT
Value
Utility
Internet
of ledgers
$
Platform
X-chain
+
+
Finance
Supply chain
Health
SSI
Source, Andy Martin, IBM
Business model parts at each level
• Economic model, incentives,
disincentives & behaviour
changes
• Governance model, how
decisions are made onchain via
tokens & voting or offchain &
guiding principles of fair,
democratic & open
• Commercial model, of
monetisation & fees
Business model
Providers
Benefits
Incentive
Behaviours
Openness
Commercial
Co-opetition
Govern
Decentralise
Monetise
Funding
Democracy
Trade,
trust &
ownership
Key: Token liquidity
Source, Andy Martin, IBM
Value by buying and selling of data tokenised into digital assets
DAOToken Economy
Data owners
Validate and
order
Basic services Identity Provenance Payments
Collaboration benefits Incentive
Marketplace Buy/sell data Innovator apps
Incentive
value
data
data
value
Data queriers
Collaboration benefits
value
data
Innovators
Collaboration benefits
value
data
Source, Andy Martin, IBM
Crypto - fiat Reserve fund
Customer
Demand
value
Service
Value flows in Marketplace Token
Data is tokenized as NFT
Token value designed to stay inside DAO, but may be converted to
fiat (1 of 2)
† All fee, access and stake value settlement in (utility) tokens Outflow
Inflow
Key
DAO
entity
Issue†
Data
queries
Access†
Data
owners
Fees share†
Fee share†
Innov-
ators
Stake† DApp fee†
Access†
Validate
& order
Fee†
Fee share†
Redeem
Tokens & Reserve fund
Collateral
Source, Andy Martin, IBM
† All fee, access and stake value settlement in (utility) tokens
DAO
entity
Data
owners
Data
queries
Innov-
ators
Validate
& order
Value flow
Tokens & Reserve
fund
Apps
Data
Outflow Redeem † - - - -
Inflow Issue † - - - -
Inflow Fee share † - - DApp Fee † -
Outflow - - - Stake† -
Inflow Fee share † Fee share † - - Fee †
Outflow - - Access † Access † -
Source, Andy Martin, IBM
Token value designed to stay inside DAO, but may be converted to
fiat (2 of 2)
References
• Martin, Andy, The Token Economy (October 16, 2021). Available at
SSRN: https://ssrn.com/abstract=3972111 or http://dx.doi.org/10.21
39/ssrn.3972111
• Martin, Andy, 5 Laws of Tokenomics (January 26, 2022). Available at
SSRN: https://ssrn.com/abstract=4018141 or http://dx.doi.org/10.21
39/ssrn.4018141

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0. dao as a token economy

  • 1. DAO as aToken Economy Source, Andy Martin, IBM Front end Back end Governance web3 wallets Metaverse blockchain DAO Security / NFT Value Utility SSI State Machine forTokens • Ownership • Who did what, when? Smart contracts • DAO • Apps • DeFi Tokens
  • 2. Supply Distribute DeFi Marketplace Service layer replaces commercial banks to create credit Smart contract DAO: Aggregate (small) investors Smart contract matches finance to demand Smart contract Pays investor Logistics Manufacture Smart contract releases finance from escrow Digital liquidity $ Trade Finance & ST debt Smart contract Token, Stable Coin or digital asset Key $ $ DAO is a Network Business Source, Andy Martin, IBM
  • 3. Token + DeFi + DAO = industry reinvention Go to market • Network effects Products • Revenue & value Tokenomics • Incentives / DeFi Innovation Platform Governance • As a network • Network, market or industry • DAO • Zone of sovereignty/rules • Buy & sell data • Apps & wallets earn value • Fees for activity • Professional & foundation services • Store value in the market token(s) • Skill & reputation • Win-win-win • Behaviours • Composability of funding protocols • New funding / reserve model Source, Andy Martin, IBM
  • 4. Token Economy governance is managed by the token holder in a fair and democratic way Apps DAO Wallet / Metaverse Ledgers Source, Andy Martin, IBM Tokens Users owns, that is manages, access to their data and the process to update its state Manages private keys where ownership of 100’s of tokens can be accessed & atomic swaps initiated Manages business model of value exchange (atomic swaps) of tokens for ownership or access for tokens for value Tokens are used for fund raising and decision making by token holders as the digital asset value is managed for collective win:win:win outcomes Tokens are used as rewards for helpful behaviour in providing the ledger updates & platform resources
  • 5. Governance model levels Governance Apps. •Trading •Regulation •Payments •Global trade •Trade finance •Provenance •Patient ID •Clinical trials •Supply chain Business models Business networks DAO Wallet/ Metaverse Ownership Security / NFT Value Utility Internet of ledgers $ Platform X-chain + + Finance Supply chain Health SSI Source, Andy Martin, IBM
  • 6. Business model parts at each level • Economic model, incentives, disincentives & behaviour changes • Governance model, how decisions are made onchain via tokens & voting or offchain & guiding principles of fair, democratic & open • Commercial model, of monetisation & fees Business model Providers Benefits Incentive Behaviours Openness Commercial Co-opetition Govern Decentralise Monetise Funding Democracy Trade, trust & ownership Key: Token liquidity Source, Andy Martin, IBM
  • 7. Value by buying and selling of data tokenised into digital assets DAOToken Economy Data owners Validate and order Basic services Identity Provenance Payments Collaboration benefits Incentive Marketplace Buy/sell data Innovator apps Incentive value data data value Data queriers Collaboration benefits value data Innovators Collaboration benefits value data Source, Andy Martin, IBM Crypto - fiat Reserve fund Customer Demand value Service Value flows in Marketplace Token Data is tokenized as NFT
  • 8. Token value designed to stay inside DAO, but may be converted to fiat (1 of 2) † All fee, access and stake value settlement in (utility) tokens Outflow Inflow Key DAO entity Issue† Data queries Access† Data owners Fees share† Fee share† Innov- ators Stake† DApp fee† Access† Validate & order Fee† Fee share† Redeem Tokens & Reserve fund Collateral Source, Andy Martin, IBM
  • 9. † All fee, access and stake value settlement in (utility) tokens DAO entity Data owners Data queries Innov- ators Validate & order Value flow Tokens & Reserve fund Apps Data Outflow Redeem † - - - - Inflow Issue † - - - - Inflow Fee share † - - DApp Fee † - Outflow - - - Stake† - Inflow Fee share † Fee share † - - Fee † Outflow - - Access † Access † - Source, Andy Martin, IBM Token value designed to stay inside DAO, but may be converted to fiat (2 of 2)
  • 10. References • Martin, Andy, The Token Economy (October 16, 2021). Available at SSRN: https://ssrn.com/abstract=3972111 or http://dx.doi.org/10.21 39/ssrn.3972111 • Martin, Andy, 5 Laws of Tokenomics (January 26, 2022). Available at SSRN: https://ssrn.com/abstract=4018141 or http://dx.doi.org/10.21 39/ssrn.4018141

Editor's Notes

  1. Blockchain - rewrites and codifies the economics of trade but only when the cost and time required to establish that trust and ownership is at or below a tipping point per transaction. Imagine when central banks issue CBDC then all of the costs of commercial banks, to create credit, can be replaced by blockchain’s automated distributed, decentralized finance as a new service layer. That surely changes the economic model a lot in favour of blockchain. What then becomes critical is who owns the consumer facing wallet infrastructures? For example in an economy of intelligent “things” trading with other intelligent “things” this layer becomes a wallet held on hardware chip in the device. 
  2. add in the 2nd row “Products & Services” / “Buy-Sell data & services” “Apps & Personal Wallets earning fees & payments” / “fees for activities, professional services & foundation services” / “Store value in the market (tokens) + store experience & worth (Reputation Tokens) When a CEO is measured on EPS and the network DAO’s tokens performance
  3. Charlie Northrup’s multi-key and digital agent model will allow for that. My material applies to the Internet of Value, the metaverse, and any p2p implementation as well - none of which are limited to the Web.
  4. *blockchain as a structural concept* for business models/processes. For this you need an economic model with a token that has to have value and liquidity in the real world. This has unfortunately proven to be the Achilles heel in recent times, when we see single individuals being able to influence and manipulate the value of the said tokens, to unacceptable degrees. Decentralization of network has, in effect, given rise a Centralization of influence. Also, this has become the convenient stick with which the regulators and governments, afraid to lose their power over their monetary systems, have been beating back this inevitable revolution. Incentives and disincentives are primarily for influencing behavior on-chain as well as off-chain. This behavior should promote multi-stakeholders collaboration on the network giving rise to opportunities for monetisation. So, incentives and disincentives are indirectly related to monetisation.
  5. In my view a neutral ground where data can freely interoperate, in a standardized format, be exchanged instantaneously and priced with real-time settlement, is a critical element to realize this vision. A real cloud so to say. Where users retain control and sovereignity over their data. As timestamp sever the blockchain provides the structuring of data and hierarchy in order to index, screen and audit the exponentially growing amounts of data more easily. Bottom line in is the blockchain is the missing piece for many visions we have, including AI, the datacosm and the metanet.