Building Resilient Economies with token economics

Resilient Economies.

Welcome to all our new subscribers! Please forward today's note to a friend, neighbour, colleague, frenemy, or in-law to spread the word. And for those who missed last week's episode, you can find it here. 

This is not financial advice.

Economics of tokenisation and ecosystem is free weekly in your inbox. Please share it with anyone that can benefit from this knowledge.

Share

Title: What is the missing piece of all token economies these days? Building resilient designs

We need to build resilient economies because we are designing systems to be run by a decentralised community. The economy needs to be resilient because there is no "off switch" to press like there is in a centralised governing community.

The more resilient an economy is, the safer that economy is.

People, Systems, Civilisation

Systems that we design are propagated by simplifying all the complexity down into some basic rules.

A question that needs to be answered is: “resilience to what and for whom?” Making something resilient is going to impact something else as there are always trade-offs in systems.

People are adaptable to situations such as disasters. What we are doing is to build adaptive systems that capture people’s adaptability. It is tougher to build resilient systems purely from the engineering perspective because they might not be able to account for the changing environment. We call these incomplete contracts economic.

However, we can add aspects of resilience or adaptability into the design of a system or economics. For example, pairing machines to aggregate data with humans, who can make better decisions based on the mountain of data. The biggest benefit is to create these adaptable systems to take advantage of the strength of both machines and people.

Machines can make some decisions or aggregate decisions to turn qualitative or quantitative stuff into a more digestible format. Humans are great at adapting the information produced. Machines and humans can work together to leverage the best of both strengths.

What Else Did You Miss?

  • How can we build systems that align and mitigate the differences?

    • Imminent Development

    • Intentional Design

  • Why is this important in DeFi and Crypto?

Get premium access to unlock more content


Ps: Order the textbook "Economics and Math of Token Engineering and DeFi" today!