In a global economy becoming more and more digitized, blockchain-based tokenization could become a powerful and even perfect tool.
Platform business models have become all but the de facto business model for the digital economy. This dependence means that unsustainable practices of platform business models impact the overall sustainability of the digital economy. Regarding the generation of network effects, platform business model owners would be well-advised to consider blockchain-based tokenization.
Platforms generate value by creating marketplaces where participants can easily transact. By digitally matching supply with demand, platform business models provide a scalable base for new value propositions, novel revenue models or a means to build on the assets of private individuals.
The application of platform business models varies from ride-hailing and food delivery apps to mobile phone networks. Regardless of the market, the success of platform business models depends on the generation of network effects, meaning that ongoing growth for both demand and supply is necessary for the platform to generate value.
To generate network effects, platform business owners have relied upon subsidies as the incentive mechanism to draw both users and suppliers to the platform. An example would be a ride-hailing app that would provide higher-than-market rate payments to drivers and provide cheaper-than-market rate rides to customers while subsidizing the difference out of company funds.
In theory, using subsidies as a means to generate network effects is not all that problematic. The issue comes in when competing platform business models also use the same strategy. As the competition intensifies, both users and suppliers migrate to other platforms offering higher incentives. This forces platform business models into a cycle that requires continued financial support and threatens the sustainability of the platform.
The core breakthrough of blockchain technology has been digital scarcity — the combination of the transferability of digital files with the proven scarcity of scarce commodities, such as gold.
Digital scarcity in the form of tokenization can be leveraged by platform business models to create network effects.
When specific criteria — such as a limited supply of tokens, exclusive use of the tokens, exchangeability of tokens for fiat currencies and availability on an exchange — are met, then suppliers can be incentivized through co-ownership of the network. Fiat currency is then exchanged for tokens to pay for rides. Because of the limited supply, the value of the tokens will go up as the demand for the service grows. This token value growth attracts more drivers which, in turn, attracts more users as well.
By making drivers co-owners, tokenization provides the additional benefit of addressing multi-homing — the use of multiple platforms by various suppliers and users — as well as disintermediation — participants not using the platform anymore after being introduced.
Although tokenization potentially holds the key to sustainable business platform growth, there are additional considerations to take into account. Token economics and governance — basically, the fine-tuning of the incentive mechanism and its management to fit specific requirements — are very important.
The type of token is also another consideration. Depending on the jurisdiction, the choice for a utility, equity or security token will have an impact on taxation and how it is generally regulated. Due to the additional steps regarding token ownership, transaction and exchange usability is also a fundamental challenge to address.
Although the regulatory environment in some jurisdictions is also unclear, the amount of experiments and subsequent findings has led to remarkable progress in the field — progress that we are likely to see in the next generation of household-name business platforms.
As the global economy becomes increasingly more digital, the sustainability of its almost de facto business model is becoming just as important. Blockchain-based tokenization is by no means perfect, but it is a powerful tool that every platform business owner should seriously consider — not just for the sake of the business but also for the sake of its participants.
|#||Crypto||Prediction||Accuracy||CVIX||Price||24h||7d||Market Cap||7d price change|
|1||BTC||Bitcoin predictions||64%||82||$62 488.63||-3.64%||4.14%||$1 177 967 573 023|
|2||ETH||Ethereum predictions||68.8%||59||$4 068.60||-3.68%||6.60%||$480 218 275 266|
|3||BNB||Binance Coin predictions||65.6%||64||$487.00||0.41%||5.45%||$81 232 757 218|
|4||ADA||Cardano predictions||90%||12||$2.16||-3.51%||-0.25%||$71 124 377 873|
|5||USDT||Tether predictions||94.8%||1||$0.999949||-0.01%||-0.03%||$69 609 559 941|
|6||SOL||Solana predictions||71.2%||53||$210.38||12.01%||31.71%||$63 287 438 999|
|7||XRP||XRP predictions||76.4%||50||$1.092820||-3.33%||-2.91%||$51 303 932 082|
|8||DOT||Polkadot predictions||60.8%||76||$45.02||2.47%||12.55%||$44 462 779 671|
|9||USDC||USD Coin predictions||94%||1||$1.000021||0%||-0.03%||$32 366 610 328|
|10||DOGE||Dogecoin predictions||72%||57||$0.242619||-3.41%||5.70%||$31 977 359 825|
|11||LUNA||Terra predictions||68%||63||$44.79||9.15%||22.52%||$17 986 948 803|
|12||UNI||UniSwap predictions||74.8%||55||$26.28||-2.63%||1.68%||$16 074 093 687|
|13||AVAX||Avalanche predictions||68%||64||$66.36||7.76%||20.65%||$14 618 840 973|
|14||WBTC||Wrapped Bitcoin predictions||61.2%||82||$62 554.90||-3.80%||4.06%||$13 830 451 764|
|15||LINK||Chainlink predictions||76.8%||48||$29.50||4.25%||10.85%||$13 553 897 471|
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