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
- 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.
- Market-Driven Signals: Market-implied yields on medallions can indicate the relative cost of capital for different regions or technologies.
- Economic Focus: Medallions focus on maximizing revenues or capacity rather than market cap, avoiding the fragmentation of decentralized governance.
- Generalizability: The medallion system can be adapted to different contexts beyond geographic regions.
- 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).