Dual Token Blockchains

It is standard for blockchain platforms to issue native tokens, currencies, that users must own to operate within the platform. Some blockchains however decided to issue two tokens, a dual system, one typically for governance and the other for implementing functions on the blockchain, such as executing transactions or smart contracts. Therefore, the two tokens are used for different activities. Typically, owning the governance tokens gives right to receive the other token for free, as a reward for participating to the blockchain decision-making process. However, both tokens can also be traded on some exchange nodes, which means that platform functions could be implemented even without owning governance tokens. In the paper we discuss some economic fundamentals of dual-token blockchain platforms. In particular, we investigate the market relative attractiveness of the two tokens by introducing some simple numerical indicators, based on prices, traded and circulating monetary quantities. Such indicators, which are meant to reflect the platform view on the tokens’ market desirability, could be computed in real time and used to support the platform’s policy making.