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The Token Economy
Andy Martin
Token economy
Process codifies & automates the
business model, organisation &
governance for trading & use of
digital assets
Smart Contract
Tokenisation associates ownership,
identity, governance & access rights
Digital Asset NFT Value
Utility
Shared, trusted, timestamped &
distributed & decentralised source
of the truth of that digital asset
Blockchain
Source, Andy Martin, IBM
Token economy – what’s different?
Market data
Platform power
Identity
Incentive
Liquidity
Monetisation
Central
Lock-in
“Controls”
Winner takes all
“Analogue”
Platform
Distributed & decentralised
Open-neutral
“Verifies”
Win-win-win
“Digital”
Data owner, innovator &
platform
Old New
Source, Andy Martin, IBM
Supply Distribute
DeFi Marketplace
Service layer replaces
commercial banks to create credit
Smart contract
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,	CBDC	or	Stable	Coin	or	digital	asset
Key
$
$
Token economy
Source, Andy Martin, IBM
Token	economy
Process
Wallet
Data
Process
Wallet
Data
Process
Wallet
Data
Distributors
Logistics
Inventory
Sales
Private
Inventory
Purchasing
Private
Billing
Shipping
Private
Shared Shared
Shared
$
Suppliers
fees
Service Providers
API API
API
Key Artificial	intelligence Internet	of	things Source, Andy Martin, IBM
Token economy – 3 business levels
Governance
Tools
Platform
Business
model
Application
Food
provenance
Disputes
Mgt.
Bundled
payment
Patient
consent
Grid
management
Energy
trading (P2P)
Regulatory
reporting
Subrogation
Mineral
provenance
Paperless
trade
DAO
Business
network
Consumer
Health Energy
Insurance Industrial
Token
Key
General
applications
Digital
assets
Cross
chain
Native
Native Platform
Loyalty
ID
Govern
Utility
Native
Behaviour Energy
Source, Andy Martin, IBM
Blockchain platform– “holy trinity”
• 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
App Store – DAO
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
Token economy business model template - 1
Source, Andy Martin, IBM
Crypto - fiat Reserve fund
Token economy business model template - 2
† 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 economy – where to start?
Automotive
Banking
Energy & Utilities
Telco
Distribution/Consumer
Travel & transport
Identity
Provenance &
visibility
Ecosystem
reconciliation
Tokenisation
Value
exchange
•Vehicle ID
•Vehicle lifecycle
•Supply chain visibility
•Vehicle leasing •Car eWallet •Financial settlements
•KYC/KYT •Collateral mgt. •Post trade
•Issue, custody &
service
•Payments
•Usage on a singular
entity
•Cybersecurity device
provenance
•Grid balancing
•Renewable energy
credits
•Peer to peer trading
•Mobile security •Supply chain mgt.
•Roaming, fraud &
overage mgt.
•Digital services
enabler
•Platform services
marketplace
•KYB / KYS / SSI •Anti-counterfeit
•Disputes mgt.
•Post trade
•Circular &
sustainable economy
•Engagement e.g.,
recycling & loyalty
•Passenger •Baggage handling •Multimodal tickets •Loyalty X-industry •Travel marketplace
Source, Andy Martin, IBM
Token economy – a strategic framework
Incentives &
token design
App.
Co-opetition
Collaborative Value Differentiating Value
Identity
Provenance
& visibility
Value
exchange
Private
data
Private
process
Strategy
Optimize existing markets Reinvent markets
Experiment in markets
DAO
Platform
Network
Join Build Extend
Network effects
Source, Andy Martin,
Platform
Public Private Composite
Technical services
Roadmap

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Andy Martin - Token Economy Graphics

  • 2. Token economy Process codifies & automates the business model, organisation & governance for trading & use of digital assets Smart Contract Tokenisation associates ownership, identity, governance & access rights Digital Asset NFT Value Utility Shared, trusted, timestamped & distributed & decentralised source of the truth of that digital asset Blockchain Source, Andy Martin, IBM
  • 3. Token economy – what’s different? Market data Platform power Identity Incentive Liquidity Monetisation Central Lock-in “Controls” Winner takes all “Analogue” Platform Distributed & decentralised Open-neutral “Verifies” Win-win-win “Digital” Data owner, innovator & platform Old New Source, Andy Martin, IBM
  • 4. Supply Distribute DeFi Marketplace Service layer replaces commercial banks to create credit Smart contract 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, CBDC or Stable Coin or digital asset Key $ $ Token economy Source, Andy Martin, IBM
  • 6. Token economy – 3 business levels Governance Tools Platform Business model Application Food provenance Disputes Mgt. Bundled payment Patient consent Grid management Energy trading (P2P) Regulatory reporting Subrogation Mineral provenance Paperless trade DAO Business network Consumer Health Energy Insurance Industrial Token Key General applications Digital assets Cross chain Native Native Platform Loyalty ID Govern Utility Native Behaviour Energy Source, Andy Martin, IBM
  • 7. Blockchain platform– “holy trinity” • 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
  • 8. App Store – DAO 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 Token economy business model template - 1 Source, Andy Martin, IBM Crypto - fiat Reserve fund
  • 9. Token economy business model template - 2 † 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
  • 10. Token economy – where to start? Automotive Banking Energy & Utilities Telco Distribution/Consumer Travel & transport Identity Provenance & visibility Ecosystem reconciliation Tokenisation Value exchange •Vehicle ID •Vehicle lifecycle •Supply chain visibility •Vehicle leasing •Car eWallet •Financial settlements •KYC/KYT •Collateral mgt. •Post trade •Issue, custody & service •Payments •Usage on a singular entity •Cybersecurity device provenance •Grid balancing •Renewable energy credits •Peer to peer trading •Mobile security •Supply chain mgt. •Roaming, fraud & overage mgt. •Digital services enabler •Platform services marketplace •KYB / KYS / SSI •Anti-counterfeit •Disputes mgt. •Post trade •Circular & sustainable economy •Engagement e.g., recycling & loyalty •Passenger •Baggage handling •Multimodal tickets •Loyalty X-industry •Travel marketplace Source, Andy Martin, IBM
  • 11. Token economy – a strategic framework Incentives & token design App. Co-opetition Collaborative Value Differentiating Value Identity Provenance & visibility Value exchange Private data Private process Strategy Optimize existing markets Reinvent markets Experiment in markets DAO Platform Network Join Build Extend Network effects Source, Andy Martin, Platform Public Private Composite Technical services Roadmap