Key Differences in Building an Economic Model in Web3 vs. Web2.
#demidas_education #tokenomics
In a previous post, we compared the concepts of tokenomics and cryptoeconomics. Now, we want to delve deeper into building an economic model for Web3 projects.
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· Every user influences the Web3 system.
If you reward a user for useful actions (e.g., swaps in AMM) with tokens that carry no value, they may sell them, reducing the token's price. A native token staker might sell, leading to a price drop. Consequently, a third user may not want to perform swaps, as the tokens might be worthless.
This chain of events can lead to a negative impact on the economy of your token.
· User behavior cannot be controlled, only incentivized.
This means you need to define mechanisms in advance to encourage desirable behavior — the one that is profitable for you as a founder and interesting to the user.
At the same time, it is necessary to consider that users may have different motives.
· Possibility of exploits.
There is always a category of users who aim to gain "unfair" advantages from the project.
The larger the amount of funds locked in the protocol (TVL), the higher the likelihood that these users will appear in your protocol.
· Shiftability of narratives.
The Web3 market is dynamic. Trends and narratives actively replace one another.
Today, we observe the success of Notcoin. In the previous cycle, Stepn was popular. One of the first projects that attracted wide attention to the crypto realm was Dogecoin.
—
Thus, transitioning from Web2 to Web3 requires considering many new factors and peculiarities.
Developing an effective economic model in Web3 requires a deep understanding of the mechanisms of cryptoeconomics and considering the interests of all participants in the system.
deMidas x Alexey Karanyuk (gnts.ai).
Media about web3 VC: @demidas_com
#demidas_education #tokenomics
In a previous post, we compared the concepts of tokenomics and cryptoeconomics. Now, we want to delve deeper into building an economic model for Web3 projects.
—
· Every user influences the Web3 system.
If you reward a user for useful actions (e.g., swaps in AMM) with tokens that carry no value, they may sell them, reducing the token's price. A native token staker might sell, leading to a price drop. Consequently, a third user may not want to perform swaps, as the tokens might be worthless.
This chain of events can lead to a negative impact on the economy of your token.
· User behavior cannot be controlled, only incentivized.
This means you need to define mechanisms in advance to encourage desirable behavior — the one that is profitable for you as a founder and interesting to the user.
At the same time, it is necessary to consider that users may have different motives.
· Possibility of exploits.
There is always a category of users who aim to gain "unfair" advantages from the project.
The larger the amount of funds locked in the protocol (TVL), the higher the likelihood that these users will appear in your protocol.
· Shiftability of narratives.
The Web3 market is dynamic. Trends and narratives actively replace one another.
Today, we observe the success of Notcoin. In the previous cycle, Stepn was popular. One of the first projects that attracted wide attention to the crypto realm was Dogecoin.
—
Thus, transitioning from Web2 to Web3 requires considering many new factors and peculiarities.
Developing an effective economic model in Web3 requires a deep understanding of the mechanisms of cryptoeconomics and considering the interests of all participants in the system.
deMidas x Alexey Karanyuk (gnts.ai).
Media about web3 VC: @demidas_com