Token Economy Design: The LAOS Network Case Study

Affan Imran and Vajresh Balaji

Apr 4, 2024

We are thrilled to share our recent collaboration with Areta on our advisory work for LAOS Network, where we provided them with our expertise in token economy and incentive design. In a recent article, LAOS Network highlighted the success of this project and announced that FINMA, the Swiss Financial Market Supervisory Authority, has classified their token as a utility token. This is a significant regulatory milestone for LAOS Network and a testament to the quality of their project.

What is a Token Economy?

A token economy is a system that uses tokens to incentivize and reward desired behaviors. Tokens can be used to represent a variety of things, such as access to services, voting rights, or in-game items.

Key Elements of a Successful Token Economy

There are a number of key elements that contribute to the success of a token economy. These include:

Token Utility: Tokens must have real utility and value to users. Tokens that are simply used for speculation are unlikely to be successful in the long term.
Token Distribution: The distribution of tokens should be fair and equitable. A small number of individuals or entities holding a large percentage of tokens can lead to centralization and a lack of trust in the system.
Token Economics: The token economics should be carefully designed to ensure that the token supply is sustainable and that there is a balance between supply and demand.
Community Engagement: A successful token economy relies on a strong and engaged community. The community should have a say in the governance of the project and should be actively involved in its development.

Learn more about how to design a successful token economy

The LAOS Network Case Study

We applied these principles to the design of the LAOS Network token economy. The LAOS token is used to access a variety of services on the LAOS Network. LAOS Network is building a Universal Layer-1 for dynamic digital Assets.

Developers can launch on the blockchain of their choice and use LAOS Network to scale the minting and evolution of assets in a trustless way, without requiring their users to use a bridge, buy new tokens or wrap their assets.

Gaming Companies can boost their user acquisition by allowing players to use assets from any blockchain. Once users pay to import their assets, the Gaming team can use LAOS to extend metadata in a permissionless way and introduce new attributes that are evolved within the game.

(source: LAOS Whitepaper)

Fantastic Day advised the LAOS Network team on the LAOS token mechanisms that will power the minting and evolution of assets. It distributes decision-making power from a centralized structure to the community enabling any holder of LAOS to vote on key protocol decisions.

We are confident that LAOS Network will continue to be successful in the long term and are excited to see what the future holds for LAOS Network.