# A view on token economies

*Are tokens the best thing since sliced bread?*

By [Thoughts from MC10](https://paragraph.com/@mc10) · 2022-12-05

web3, tokens

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[Shermin Voshmgir](https://twitter.com/sherminvo), author of [Token Economy](https://www.amazon.de/s?k=token+shermin+voshmgir&i=stripbooks&camp=1638&creative=6742&linkCode=ur2&linkId=a681deea38b7c58c222f468b096ae64d&tag=sherminde01a-21&utm_source=amazon.de+all+token+economy+books), writes:

> _If we assume that the WWW revolutionized information, and that the Web2 revolutionized interactions, the Web3 has the potential to revolutionize agreements and value exchange. The Web3 changes the data structures in the backend of the Internet, introducing a universal state layer, often by incentivizing network actors with a token. The backbone of this Web3 is represented by a series of blockchain networks or similar distributed ledgers._

In a web3 context, tokens are ways to distribute ownership of _something,_ in a way that, thanks to the underlying blockchain, is native to the platform or the protocol and doesn't require intermediaries.

Sometimes I meet people that believe that modeling a token economy equates to engineering a Ponzi scheme. This is especially true when I meet people that don’t know what they are talking about.

Their reasoning is something along these lines: “You want to own a token just because you expect that it will appreciate in value over time, so that you can sell it to somebody else that also expects that same token will continue to appreciate in value”.

That is a way of seeing the world - which actually is totally analogous to buying, say, [TSLA 2.42%↑](https://substack.com/discover/stocks/TSLA) shares hoping they will go up so that, in some time, you can sell them to the next person that still believes there'll be 1 million robotaxis on the roads by 2020.

I am not entirely sure how the two scenarios are fundamentally different, but that is not even my argument.

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_You can read the full article here:_ [https://www.mc10.xyz/why-token-economies-are-not-a-fad/](https://www.mc10.xyz/why-token-economies-are-not-a-fad/)

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*Originally published on [Thoughts from MC10](https://paragraph.com/@mc10/a-view-on-token-economies)*
