🤖 Tokenomics Model

Figure 17 illustrates the flow of payments of the Tonomy native currency between the various roles in the network.

These are:

  • Services provide the digital infrastructure, including servers and other necessary elements for network operation.

  • Services are automatically paid through the Gov treasury on the basis of the incentive structure of the network

  • This treasury is funded from the payment of features through Apps by People and DAOs.

  • Features offer both free and paid access, with People generally having some level of free-tier resource access based on identity verification, while DAOs pay for all feature usage.

  • Services are owned by DAOs which are run by People. Gov is also a DAO.

In this way, a circular economy is generated. The accounting system underlying this facilitates the guaranteed availability of the network and insurers bad actors and not undermine the system.

This model is used to analyse the tokenomics of the system which are sound when both the following two conditions are met:

  • Economics: when the payments into the Gov treasury are equal to the incentives out of the treasury.

  • Security: when all underlying resources provided by each infrastructure service are guaranteed to always be available.

The model does not take into account additional optional features the ecosystems may decide to use the Tonomy native currency for such as incentives for contributors to the governance system or for use as legal barter for goods and services between DAOs and People, as these do not effect the security model.

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