Multi-Token Systems

Dual-token vs. Single-token Models

• Dual-token Models: Clearly separate governance from utility, providing targeted incentives and simplifying economic management. Variations include Off-chain/On-chain or dual On-chain systems. Axie Infinity utilized a dual-token model (AXS governance token and SLP utility token), though with mixed results.

• Single-token Models: Simplify user experience but require careful economic management to balance different token roles effectively.

Ecosystem Token Interactions

Multi-token systems must clearly define interactions to avoid complexity and unintended economic behaviors. Effective design prevents arbitrage opportunities and aligns inter-token incentives toward overall ecosystem sustainability.

Risks and Benefits of Multi-token Structures

• Risks: Increased complexity, potential liquidity fragmentation, higher user learning curve.

• Benefits: Clear separation of roles, targeted incentives, and reduced risk of single-point economic failure.