Tokens | The New Economic Moat

Tokens are multi-purpose instruments and this is where entrepreneurs can exploit a wide-ranging set of tools to invent and create new ways to exploit a token’s prowess. This, in turn, can help them build a sustainable economic moat for their businesses.

When innovation is at the token level, companies have to think about their unit economics at the token level as well. If your business cannot exactly define the role of the token, it may be susceptible to market forces from competitors or be completely disrupted by something new. Proteum works with top management and senior executives to clearly understand the economic scope of tokens and chart a sustanable competitive advantage.

Proteum has categorized some of the issues that our CXOs face early on in their path to a tokenized business model.

A Framework for Understanding the Economics of a Token

How essential is the token to product usage?

Does the token provide exclusivity to the users?

What rights does a token impart to the product users?

How does the token holder add value to the network of participants?

Does owning a token impart direct or indirect ownership of the underlying business?

Does the token holder have a claim on the equity or cash flows of the business?

Are the tokens mined or allocated?

In either case, are these tokens purely utilitarian or fall under Govt. regulation?

Is the token a necessity to run smart contracts?

Or are tokens essential for accessing distributed data resources on the network?

Token as a Payment Unit

Are all internal transactions accounted by the Token?