Challenges in TEA token economy design

Token economy design is neither easier nor less important than technical design in terms of a blockchain project. As a code monkey, I learned a lot about economics in recent years, but I still feel shaky when designing the TEA token economy. Thankful I got a lot of help from our community members, such as “Blue Fox”.

Today, I will talk about the challenges I was facing and how we plan to overcome them in my future blogs.

A TL;DR version of the technical introduction to TEA

If you have not and do not want to read the technical white paper, here is the best you can get. A TL;DR version. You can learn the basics of TEA, just long enough to understand the rest of this blog.

Consider TEA is a specially designed Amazon EC2 /Google Cloud / Microsoft Azure that provides similar computing services. But TEA doesn’t own any of those servers nor data centers. If you know Uber or Airbnb, you would understand what I mean. TEA is a protocol and Trust-as-a-Service that connects the clients (other blockchain or traditional customers). Providers (usually called miners in the blockchain world, should be called farmers here since they grow camellia and harvest tea). TEA’s technology eliminates security and trust concerns by providing the PoT (Proof of Trust) Consensus.

Roles in the TEA ecosystem that need to deal with

Miners(or farmers): They buy or rent physical or virtual TEA mining machines. They earn reward from the execution of tasks the TEA consensus assign to them. The reward is paid in TEA token, $T for short.

Camellia: The name comes from the plant that tea harvests from. In our TEA Project, Camellia is an NFT, CML for short. A TEA mining machine has to have a CML associate to become an “active” mining node. CML can be traded as it has value. It also has its life cycle. It was born from seed. It grows and eventually dies.

Investors(or landlords): They do not want to deal with the hassle of maintaining a TEA mining machine. They are pure capitalists. They stake their $T to a Camellia owned by a miner. They receive revenue share in $T from this camellia as a shareholder.

DAO: The decentralized autonomous organization that governs the ecosystem. Assume it is a Utopian-Capitalism-type democracy government. Members vote using their stake to make decisions.

Last but not least, $T is not a role. It is a utility token. Its value is pegged to measurable computing consumption.

The challenges

• The incentive to miners to join the mining pool
• The balance between investors and miners (landlords and farmers)
• The balance between new and old players. If old players rule, new players will walk away.
• The balance between the rich and pool. Maintain a healthy ratio to prevent centralization over time.
• The balance between different types of TEA nodes to prevent centralization. Maintain a healthy diversity to prevent any single type of node dominates the system.
• The balance between long term and short term crypto investors
• The balance between the core team and crypto investors
• Population control
• Avoid pump and dump
• Maintain token long-term value….

Do you think these are way beyond what a code-monkey is supposed to deal with? Well, that’s true. However, as a crypto entrepreneur, I have to deal with them. Let’s see how I (try to) overcome them in my future blogs.