Engineering-Oriented Tokenomics

When asked to design the Tokenomics for the ‘Blockchain for Telecommunications’ platform OpenCryptoTrust, we couldn’t prevent ourselves from putting on our ‘Engineering’ hats :)

Two categories of the Tokenomics were ready to accommodate brilliant engineering ideas; the ICO/Crowdsale and the Rewards for the block producers (miners).

In this article, we will focus on the first area and we will cover the second one in a following article.

As for the ICO/Crowdsale, the majority of ICOs seen so far tend to use a ‘step’ pricing function for the tokens that folks can acquire during the ICO.

Keeping it simple, let us say they will start with the price/token X for the first D days then they will move to the price/token Y for the next D days (where Y > X) and so on in order to encourage more investors to jump in early in the crowdsale (the early bird discount model)

Sometimes it’s getting complicated than this simple approach but it all falls under the same concept.

In our case, we chose to differentiate between the Pre-ICO and the ICO in terms of pricing structure.

For the Pre-ICO, 10% of the maximum supply of tokens are currently available and we use a legacy ‘step’ pricing function where the price/token started with US$0.75 and increases by a small % every month (over the 4-month pre-ICO period)

Because of the nature of the 'fixed' or 'step' prices, discount is available for large volume (mega private deals)

During the ICO period (a couple of months starting from the 2nd of August, 2018); 40% of the maximum supply of tokens will be available and we’ll use a ‘Linear’ function for the token price, i.e. the price/token is different & unique for each token.

The linear function has a start price/token for the first token available during the ICO and an end price/token for the last available token.

No discount exists during the ICO as it’s actually ‘built-in’ the linear function logic.

Interesting! Isn’t it?