CSDN VP: Design of Token Economy Should Weight At Least 50% In Crypto Rating
According to the interview conducted by 36kr, Meng Yan, VP of CSDN, share his insights on the design of token economy, which, he believes, is the core of blockchain projects.
He said that only a few people were studying the token economy after the ICO Ban in China last September. He was approached by some project leader on the potential and most important of all, the answer to “sustainable prosperity” of a certain design of token economy.
“At present, there are not many people in this field in China. As far as I know, Professor Xiao Feng of Wanxiang Blockchain, Shen Bo of Fenbushi Capital and Professor Yang Dong Renmin University are on the list.”
Currently many blockchain startups choose to do crypto ratings. Most of their criteria cover development team and cornerstone investors and none lay eyes on the design of token economy. But Meng’s vision is not to initiate such a rating startup. Instead, the design of certain token provides a unique perspective on the vision, attitude, recognition and strategic capability and is a very important reference for investors and developers. His biggest concern is that China might be left behind in this respect.
“Foreign projects have improved rapidly in this area. The design of many outstanding projects is pretty rough. But project this year is obviously improved. What I am more worried about is that if Chinese do not engage in this area or that they do not share in time, and could be left behind.”
He says that the weighing of economy design should be at least 50% over the total rating.
“Apart from looking at its resource endowments, you mainly have to look at its rules design. Of course there are no certain rules to follow, good system must adapt to specific situations. We could see in reality that that an organization, a company, a country with a good system design, even if it is inherently inadequate, may stand out in the long-term competition.”
The same law applies to blockchain projects, a startup with good token design could outperform others in the long run.
“However, I have contacted some teams with excellent achievement in the era of internet and found that they didn’t realize it.”
Regarding the “ICO Scams”, Meng believe that the problem could be solved with more information being stored on the blockchain. He blames information asymmetry in the off-blockchain world as it facilitates many scams like fake ID, social connections etc.
“We must understand that people who engage in financial scams using the name of blockchain have their real influence offline. “.
“In fact, it is fundamental to establish an open and transparent credit system that covers the whole society and the entire life span. Blockchain is the best solution for such system. Imagine that after 30 to 50 years, most people’s academic records, job experiences, credit records, and economic relations are recorded on the blockchain with his income and expenditure records. The information is transparent. Why should we worry about scam at that time?”
Meng is also a firm believer of blockchain plus tokens.
“I still believe that the blockchain must be combined with the toknes. If there is no token, it is an ordinary technology and the significance will be greatly reduced. Then the impact it might bring to the social development is terminated.”
When designing a token economy, in addition to the game theory and political and social design, Mena Yan says that simulation test is a must.
“When a system is designed, we should run it in a large program to see if there are hundreds of thousands or millions of people accepting this thing and stick to the system for 3-5 years. What the final wealth distribution is like? If the final wealth distribution is extremely uneven, you have to consider which aspects of the design have gone wrong and then make adjustments.”