On Network Effects in Blockchain-based Systems
“If you’re building a product that relies on a network effect, creating a governance token or adding governance privileges to your existing token can be incredibly powerful. It increases voice for participants and makes the network effects more resilient.”
Duncan explains the importance of governance to make token-based networks future-proof while retaining the immutability of the network. This piece also explains how “true network effects” require the token to meet specific requirements. In these defensible token models it is not possible to create a better user experience by removing the token or replace it with a different token.
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