Tokenomics Design

General
1

LXDAO has been running for 1 year and in that year we have had many remarkable gains, in this post I will launch the design of the LXDAO tokenomics

TLDR

Tokenomics is a very important aspect for projects. Not only is token economics about the white paper, founding team, roadmap, and community development, but it is also central to assessing the future prospects of a blockchain project. Cryptocurrency projects should be developed with a carefully designed tokenomics model of the token to ensure long-term sustainability.

Description

In Season1, we explored the general design of the tokenomics in the regular governance group meeting, and we will continue to explore and refine the design of the tokenomics in the new session
https://www.notion.so/lxdao/LXDAO-Tokenomics-Meeting-a13ff8c841aa4178a951b3dd674b67fc

In last week’s governance group meeting, we had a preliminary discussion about tokenomics, and the current goal is to sort out the requirements and general design direction of tokenomics
In the meeting, we defined the core of the tokenomics design as ‘what problem can tokenomics solve for LXDAO’

Question For Tokenomics:

Unlike other projects in the market, we want to think about the design of the tokenomics in a deeper way
We raised a lot of questions and thoughts about tokenomics design

  • what we gain if we have Token and what we lose if we don’t have Token

  • What does it support you to do?

  • And what doesn’t it support you to do?

  • Why do you want to hold it and want to own more of it?

  • What happens if you discard or transfer ownership of the token?

Action：

We will be thinking about these issues and trying to solve them in the next design, and if you have more ideas for tokenomics design, you can reply to this post

2

The goal of LXDAO is to help public goods in Web3 achieve sustainable development, with tokens being one of the most important tools.

First, owning tokens grants voting rights, and anyone can own LXDAO tokens. LXDAO’s Builders come up with various interesting ideas, and then token holders can vote on the Builders’ proposals. Of course, you can also delegate your token voting rights to someone you trust.

At the same time, token holders can stake their tokens, which helps stabilize the value of LXDAO while allowing token owners to earn profits from staking.

Lastly, tokens are used in the daily operations of LXDAO, such as providing startup funds for projects, paying salaries and bonuses to Builders, all through the distribution of tokens.

LXDAO tokens can freely circulate in the market, and as LXDAO continues to grow, the value of the tokens will increase, allowing token holders to benefit. More importantly, Web3 is composed of public goods, and LXDAO’s goal is to enable sustainable development of public goods in Web3. Token holders can influence the direction of public goods development.

2 Likes
3

I think the token is like the gas for the car to drive the infinite loop and achieve the sustainability of LXDAO.

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I totally agree with Ray on the goal and his design. Tokens will be the unified currencies in LXDAO, so we do not need to care which token (USDC, LXP, EHT, etc.) to pay for the buidlers, just like what bankless DAO does. If the buidlers need cash, they can swap from Uniswap. They can also choose to hold the token.

We can only have limited voting and governance strategies if we don’t have the token. And also limited funds. We could imagine that we can only use the tokens in the treasury and pay with the stablecoins. It will be more like traditional companies.

From my personal view, there are several reasons:

  • The price will be going up as tokens reflect the total value of LXDAO and all of the outcomes. With time passing by, we will more and more outcomes.
  • The tokens are useful, not just for voting. We have a big room to design the utilities of the Token. For example, you can use the token to pay service fees from LXDAO products. Staking the token will receive airdrops from public goods supported by LXDAO.
  • The release plans should be careful controlled, might release with outcomes.
4

From my point of view, considering only one token, although simpler and more convenient, may bring some financial risks.
When tokens are greatly depreciated by the environment, the token expenditure may not be enough to maintain the operation of the community; when someone deliberately shorts or longs tokens, it will affect the development of the community.
What I hope should be a dual-token mechanism. When the market environment fluctuates violently, there is room for adjustment; the other also needs tokens to anchor the contribution value.

5

Firstly
1.what we gain if we have Token and what we lose if we don’t have Token
By owning tokens, you have the governance weight of LXDAO, and you can change the outcome of the proposal, including even the outcome of token issuance
If you lose your token, you lose the governance weight of LXDAO, and you do not receive any voting rights, gains or value in return for your vote.
2. What does it support you to do?
First of all, the token must have value, it can be exchanged for USDT, which can be exchanged for some substances necessary for human life
Token is the first value of LXDAO products to withdraw
Token can be exchanged for some member benefits
3. And what doesn’t it support you to do?
In the early stage, token does not support me to do leverage, and some financial derivatives, token is not as USDT or ETH and so on basically achieve full circulation
4. Why do you want to hold it and want to own more of it?
The most direct point: appreciation, the first goal of most people holding token is appreciation, whether it is short-term or long-term nature, excluding the market, the core of token appreciation lies in the empowerment, that is, how much equity the token gets in LXDAO.
First, the token has the shares or interests of the open source projects that keep being born
Second, the token controls the adoption of the proposal or not
Third, the token has brand revenue
Fourth, the token has potential revenue

5.What happens if you discard or transfer ownership of the token?
If I sell, then I lose the governance weight of LXDAO

My recent new thinking is that we can’t design a perfect tokenomics, what we should do is to split the functions, design some of the most important functions, then modularize them, make proposals, for example: token the most core governance rights, how much the governance weight is, then how to accumulate, explain this part clearly, this is a module, then each different proportion of the tokenomics pool by the specific proposal to allocate, or even that, if we have more than 50 ~ token allocation is not explained clearly, then we directly say not explained clearly, design a good big rule, by the community to follow the meeting of each season, to decide the distribution results

6

The dual-token mechanism isn’t a silver bullet. We can research and see how they are going. Not sure if it is better or not.