It is evident with the emergence of cryptocurrency in the past decade that digital assets can be applied in numerous fields more than just displacing the fiat currencies already in existence.
Digital assets can be used, for instance, to:
- Offer access to Dapps (decentralized applications)
- Represent ownership
- Eradicate the barrier of entry to financial ecosystems
- Tokenize assets
Because of the different uses, cryptocurrencies and their underlying technology have the power to build new economic systems that have never existed before. The features of each token differ as you will soon learn how we are utilizing the XCT token for our ecosystem.
Having a basic understanding of token economics as the underlying framework of digital currencies can help you to determine the projects that can be regarded as stable.
In this article, we will discuss the dynamics of token economics and give you the first insight that will help you comprehend the token behind the xCrypt ecosystem and possibly any of your favourite cryptocurrencies.
Overview of Token Economics
Token economics generally denotes the immense studying, designing, and operation of economics systems, which are strictly tied to blockchain technology. Each blockchain platform and blockchain operation utilizes its economic model.
The subject of token economics has a strict focus on the earlier economic systems that are new and build through digital currencies. This excludes tokens that are exclusively used for fundraising, and it has no essential role to play in the platform since they are not stroked as new models.
Token securities have been available for some time, and their dynamics have been well comprehended over time. Though, blockchain and cryptocurrencies can enable a more powerful way to deal with securities when it comes down to ownership and transferability.
The hypothesis on which all the models of token economics are based is that humans behave based on incentives. This position is, however, based on the incentive assumption.
It is a human behavioural theory that assumes an appeal for incentives prompts actions. For token economics, the incentives are the tokens. They are used to engage the communities of an ecosystem to behave accordingly to benefit from the same ecosystem.
It is worth noting that these incentives are monetary since tokens have a monetary value when traded on exchanges.
The Benefits of Token Economics
When a project decides to create a token, they ought to come up with an economic model for the use of their token.
Basically, tokens are used for value exchange; this is the primary application for cryptocurrencies. To ensure that the system of a blockchain or its application functions effectively and keeps progressing, tokens must be used. And because there is no central authority in most cases, tokens are essential for the existence and growth of a decentralized platform.
Our value strategy for the XCT token features numerous mechanisms to stimulate its growth.
Our token has multiple applications beyond a speculative asset on an exchange, and this includes but is not limited to;
- XCrypt rewards XCT token holders through an airdrop ranking policy using the XCT tokens.
- XCT tokens are used to acquire prime membership.
- The token is used in participating at partner ICOs’ RCs with huge bonuses proposed within the XCrypt network.
- The token is used to pay for XCrypt exchange’s DEX system charges.
- The XCT token is required to pay the crypto debit card charges.
- Lastly, the token is used to buy the PRO membership for its social networks.
We plan to cap the total supply of our tokens at 100,000,000.
To Wrap It Up
Because we are in the inception phase of the era of blockchain technology and the majority of projects and its Dapps are not being utilized fully, for now, the important question is whether the token/coins will be still applied despite the highly speculated environment we are experiencing.
We are still getting started, but there is already a good number of diverse token economic models.