Token design: Mental models, capabilities, and emerging design spaces

Eddy Lazzarin

Table of contents

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Table of contents

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Tokens are a powerful new tool in web3, used to represent data across any number of dimensions: monetary value, membership, identity, alignment, and more. Today token design is still an early field — and the formula for a “successful” token can look more like alchemy than chemistry. However, as more teams traverse this new landscape, we can start to observe some common patterns and pitfalls throughout the design process.  

In this talk (originally delivered at the inaugural a16z crypto Founders Summit 2022), Head of Engineering Eddy Lazzarin pulls from his experience collaborating with web3 teams to propose a work-in-progress framework for designing. He covers three design stages, provides an overview of current token capabilities, and tours the technological breakthroughs (like fully programmable smart contracts and ERC-20) that have unlocked new design spaces for protocol developers to explore:

Presentation notes

  1. Mental models for token design [1:14]

    1. The three-stage design process: Goals, constraints, and mechanisms [2:02]
    2. Three common failure patterns [6:16]
  2. Token taxonomy [10:32]

    1. Five categories of tokens and their capabilities [11:16]
    2. Example of token capabilities: MKR vs DAI [23:46]
    3. Example of token capabilities: B33P3R [24:05]
    4. Emerging design spaces [25:42]
  3. The token design tech tree [26:54]

    1. Conclusion: What technologies will drive the future of token design? [29:31]


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