Token Mechanics for Ecosystem Growth

Learn from Lisa JY Tan, Founder and Founding Economist at Economics Design

Effective tokenomics includes mechanisms for bootstrapping and user acquisition that vary based on your business model:

For B2C protocols (like DeFi applications):

• Reward liquidity providers who contribute digital assets to your Total Value Locked (TVL)
• Create incentives for individual users to participate in the ecosystem

For launchpads:

• Implement reputation mechanisms to reward supporters
• Allocate ownership based on higher reputation levels

For B2B engagements (such as Layer 1/Layer 2 platforms):

• Target applications building on your platform rather than individual users
• Develop contract-based rewards tied to specific milestones (acquiring X protocols, attracting X users)
• Focus less on airdrops and more on business agreements with token incentives

Your distribution strategy should align with your business model, whether you're building a protocol for direct interaction or creating a foundation for others to build upon.