# Tokenomics Design Studies: Parent + Subsidiary

**Published by:** [Eray](https://paragraph.com/@eray-2/)
**Published on:** 2022-09-26
**URL:** https://paragraph.com/@eray-2/tokenomics-design-studies-parent-subsidiary

## Content

Since the advent of crypto-assets, tokenomics has represented a novel endeavour to construct asset ownership instruments from the ground up. Nevertheless, we have just scratched the surface. I wish to make a brief analysis of how tokenomics can evolve on blockchains. Currently, tokens are largely employed as a tool for growth marketing. Protocols expend "equity" via liquidity mining in exchange for accelerating initial adoption. This has been a tremendous success, with Compound's LM event launching the inaugural DeFi Summer. Since that time, LM programmes have served as the main growth hacking method for new protocols. However, developing LM programmes is really difficult. If you give up too much, you will have little left for the future. Too little, and your rivals will eclipse you. Now, we must also consider the cross-chain scenario. Everyone played in the same pool, so nothing was complicated (base layer ETH). Vampiric forks were regarded direct competitors attempting to gain market share from the established brand. When cross-chain, L2 ecosystems begin to evolve, however, few consider what would occur. Few protocols currently have the capacity to launch several versions of their product across multiple chains. Launching many LM programmes simultaneously is prohibitively expensive in terms of technological resources and infeasible. In this part of the discussion, I will discuss the idea of friendly forks. You can green stamp a team that forks your code and the value of the channel to you, as opposed to wasting time/effort/tokens on another chain.Curve Finance / Ellipsis: Ellipsis is an authorised fork of Curve on BSC that Curve supports openly. On the back of Curve's goodwill and brand recognition, they have been able to gain significantly more market traction. Ellipsis will provide veCRV holders with a percentage of all produced fees. Airdrops of $EPS will also be sent periodically to certain token holders. Curve has boosted the value proposition of $CRV at a minimum expense by rubber stamping a friendly fork.Liquity Protocol / Fluity: Fluity is a comparable, BSC-compatible fork of Liquity. Each $LQTY holder will receive 25% of all $FLTY tokens over the course of two years. However, Liquity Protocol has no oversight over Fluity at present.These examples illustrate how protocols are beginning to develop parent-subordinate relationships. Parent receives royalties in the form of airdrops or fees earned by sub. Subsidiary benefits from parental brand recognition and counsel to accelerate early adoption.Subscribe

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