![](https://images.ecency.com/DQmaAGPU2ua2qU8fjZY4NAhJWveHuQvMDA1oZgvWSo6GZLv/image.png)

Tokenomics is just the abbreviation for Token + Economics. It’s something that I divide into different approaches: Art, Process Engineering and Business Design. 

**The Business Design** side is that a Token Architect must have a specific conception of the Business Model of the company, of how the product is working and be able to give pieces of advice on those as well. 

**The Process Engineering** part is the one entering into the design of the token flows, creating “token balances” to check how many tokens are moving in which direction. 

**The artistic design is the creative one**: merging token utilities, identifying new token utilities, integrating them with the business model in a harmonious way

![](https://images.ecency.com/DQmaugdjWmcULnp9rCJ1r67szXzHNL7ZT4STYc2XGdcS4xW/image.png)
<code>Source: a Tokenomics designed by me This is the First Layer with the token distribution across different sectors.</code>
 
The most common mistake that crypto start-ups do is to intend the approach to these three different aspects in a “containerized” and isolated way and not in an integrated way. This leads to bad integration between the real business of the Company and the integration of the token that may miss some real applications or distributions. 

That is why I call my approach to Tokenomics an “iterative approach”, as I usually do not limit my intervention to the simple token distribution schedule and the classical Pie-Diagram when you simply estimates what areas of the project will get how many tokens. 

>So, I divide my approach to Tokenomics to different layers of design.

- I usually start from the Token Utility, to check where, when and how to integrate the token into the project. 

![](https://images.ecency.com/DQmPUbJ6WRSybCv2SS44Wea2okTxpX56d8P7DW8tr62mT68/image.png)

![](https://images.ecency.com/DQmVSYQNTAydmk4DsP5DFBVCq1WaZH47Fq5JxjsFh6pXYev/image.png)

![](https://images.ecency.com/DQmWxaXNhuVH446bngNoYg52nTiQGvKDFnLoKu7enfu7t9d/image.png)
<code>Source: some token utilities designed by the Author for a crypto-copy-trading platform. </code>

- Then I create the macro-distribution (how many tokens to what purpose) to check a macroscopic balance. 

- Then, I usually check the micro-token flows, meaning how tokens will be used and distributed, according to what schedules and conditions.

![](https://images.ecency.com/DQmP1GCAphMB2DyJWiRGpcKiyz2WTT7JJAoNsLc5rVFjads/image.png)

## What are the Token Projects I like the most? 

Last year I have been contacted by a multinational corporation in the telephony business, that wanted to issue the token. 
The first things I asked were: 
>Why do you need a token? What would be the utilities? 
>Why can’t’ you use an already existing cryptocurrency and you want YOUR token? 

Let me be crystal clear: **I have nothing against new tokens**. 

>It’s like the “Dot Com” bubble. 

The deserving projects survived and the did not stopped issuing new projects simply because there were already a lot into the market. They simply kept issuing and the most deserving survived.
 
So the Telephony Company as well (which I cannot mention the name), wanted to issue the token BUT there was one key-factor there. The business was already running. It was like issuing new shares on an already working business. Simply much more liquid shares than the traditional ones. 

Using tokens to scale-up projects, creating loyalty and gamification programs are the safest ways (and motivations) to issue new tokens since they will start from an existing user base and an already running business. 

>Keeping in mind the token is NOT the product but it's just a catalyst and amplifier of the process. 

Working on Hive, I am looking at several different Layer 2 tokens and I love the idea but especially the attitude of the issuers. Many of them are sincerely driven Devs or wannabe-Devs that creates the tokens to stimulate interactions, create loyalty into users/customers, or even stimulate interactions on platforms and parallel ecosystems. 

Besides, I think that Layer2 tokens on the Hive blockchain should not have a limited vision to offer the best yield but rather the best ecosystem. 

## How to create an ecosystem for a token?

Well, the approach should be (usually) the other way around as a token should be just a tool to incentivize new users to join, create loyalty programs and reward users meritocratically.

I like here mentioning the [ForceFi ](https://ecency.com/hive-167922/@mikezillo/forcefi-introducing-the-decentralized-crowdfunding )ecosystem: there, tokens have a much intricated behaviour, meaning using them for incentives, Options, Rewards, affiliation and much more.
 
This Tokenomics I shared here is from SwapTok, a project starting from Dubai I am involved with. The project is now on hold waiting for fundings. You can check the link [here](https://swaptok.io/index.php )


But in all the cases, dropping out the tokens is not simply a “creating a token hoping that one day it will be worth more”. 

The creator should ask himself/herself: 

- Why people should use the token? 
- How to potentially create scarcity making more buying pressure rather than the selling one? 

That’s why a token should have integrated features, possibilities, advantages and stimuli for users to use/buy/aim to earn it. 

What is your approach for it? Have you ever thought to create a Layer2 Hive token?