Tokens enable Internet tribes to emerge not in the form of traditional companies as we know them, but instead in a new type of organization called a decentralized autonomous organization (DAO). A DAO is best described as a group of people bound together not by a legal entity and formal contracts, but instead by cryptographic tokens (incentives) and fully transparent rules that are written into the software.

There will be a variety of blockchain-based tokens in the future and it’s possible that when regulations are clearly established, traditional assets like stocks and bonds will be tokenized on blockchains. But for now, there are two legitimate types of blockchain-based tokens that bind participants in DAOs:

Usage tokens: A token that is required to use a service
Work tokens: A token that gives users the right to contribute work to a DAO and earn in exchange for their work

If you’re building a network-based Internet product, forming a decentralized autonomous organization, implementing a blockchain-based token into the product and structuring the token as a usage or work token is likely to be a winning business model.

Source: Tokens, Tokens and More Tokens – The Control

Tokens enable Internet tribes to emerge not in the form of traditional companies as we know them, but instead in a new type of organization called a decentralized autonomous organization (DAO). A DAO is best described as a group of people bound together not by a legal entity and formal contracts, but instead by cryptographic tokens (incentives) and fully transparent rules that are written into the software.

There will be a variety of blockchain-based tokens in the future and it’s possible that when regulations are clearly established, traditional assets like stocks and bonds will be tokenized on blockchains. But for now, there are two legitimate types of blockchain-based tokens that bind participants in DAOs:

Usage tokens: A token that is required to use a service
Work tokens: A token that gives users the right to contribute work to a DAO and earn in exchange for their work

If you’re building a network-based Internet product, forming a decentralized autonomous organization, implementing a blockchain-based token into the product and structuring the token as a usage or work token is likely to be a winning business model.

Source: Tokens, Tokens and More Tokens – The Control