Skip to main content

DePIN Tokenomic Incentives

Tokenomic strategies for DePIN networks.

AI Tokens​

Three roles for AI tokens:

  • Facilitating transactions
  • Protocol governance
  • Incentivize users

Token Medallions​

Medallions aim to create real-world value by adapting to real-world conditions, avoiding the downsides of traditional vote-escrow tokenomics. Medallions provide novel staking mechanism designed to address the complexities and limitations of traditional vote-escrow tokenomics, particularly in decentralized physical infrastructure networks (DePINs).

Mechanism​

  • Minting: Stakers lock tokens to mint medallions, with the number of tokens required increasing along a bonding curve.
  • Delegation: Medallions can be delegated to regions to earn a proportional share of regional revenues or capacity, weighted by time-under-delegation.
  • Flexibility: Medallions can be transferred, traded, un-staked, or re-delegated at any time.

Advantages​

  1. Incentives:
    • Long-Term Alignment: Medallion holders are incentivized to stake tokens as soon as possible and for as long as possible.
    • Re-Delegation: Holders are encouraged to re-delegate to higher-yielding regions, aligning incentives with network success rather than short-term gains.
  2. Market-Driven Signals: Market-implied yields on medallions can indicate the relative cost of capital for different regions or technologies.
  3. Economic Focus: Medallions focus on maximizing revenues or capacity rather than market cap, avoiding the fragmentation of decentralized governance.
  4. Generalizability: The medallion system can be adapted to different contexts beyond geographic regions.
  5. Avoiding Governance Issues: Medallions are economic instruments without governance power, preventing the compounding issues of fragmented governance.

Applications​

  • DeWi Networks: Use location-frequency pairs (e.g., NYC-3.5GHz vs. LON-6GHz).
  • Ridesharing Networks: Stratify markets based on local incumbents (e.g., Uber-dominated vs. Lyft-dominated).
  • Freelancer Marketplaces: Use professional domains (e.g., engineering vs. sales).