theAgora tokenomics - an introduction.
an introduction to the token incentives required to build open global data ecosystem.
As part of bootstrapping any emergent ecosystem creation of suitable participant incentives plays a critical role.
TheAgora is more than a just data marketplace, it is an instantiation of a micro-economy and as such requires, not only appropriate incentives but its own unit of exchange and monetary policy.
The entropy token (ENTRP) acts as the substrate, underpinning the entire Agora data ecosystem; providing the collateral to secure the system, and funding reward programs to market participants and token holders across a range of ecosystem accretive activities.
As a data exchange, incentives need to exist to promote participation in a two sided market of data producers (sellers) and data consumers (buyers). Each counterparty has slightly different motivations and requirements that need to be satisfied. Incentives need to exist to encourage seeding datasets, maintain the exchange of high quality data and discourage any detrimental activity by “bad actors”.
For commerce to occur freely a stable unit of exchange is also required; and for this we will be launching dUSD - ‘the currency of data’ as Phase II of our token roadmap. Other stablecoins exist in the market, but the additional flexibility that creation of a system specific stable unit of exchange affords us overrides many of the perceived cons from “reinventing the wheel.” We have seen this approach executed to great success by the Synthetix team where issuance of sUSD was backed by SNX tokens - and at that time there were multiple stablecoin options .
For the token economy to succeed, tokens need to be liquid and easily accessible.
To this end, rewards to token holders for provision of collateral (stake) and creation of dUSD (mint) need to be implemented. Secondary market token liquidity needs to be healthy for both dUSD and ENTRP so liquidity provision rewards programs need to be implemented.
Finally, third party incentive programs need to be executed; developer incentives, marketing rewards, and community participation rewards need to be in place.
The scale of work in building a tokenised economy is large, outcomes unknown and much that has occurred thus far remains experimental. Specifics of the token economy may evolve over time, but the above principles for incentivisation will likely remain unchanged. We take great inspiration from pioneering projects like Synthetix and Numerai who have implement some unique and effective token incentive mechanisms and we look forward to building on their great efforts.
In our future writings we will provide more details on token inflation models, token rewards from staking and minting, liquidity mining programs, and platform utilisation incentives.
In the weeks ahead we are excited to continue to launch theAgora data market and grow the hutX protocol ecosystem.
the data Odyssey continues