Halo as a method to test tokenomics

Halo as a method to test tokenomics

A challenge in designing Web3 game economies relates to issuance of utility tokens with governance rights- the design of tokenomics can be dangerously brittle if they occur in a vacuum prior to community engagement. On one hand, pressure exists to define tokenomics in detail “up front” as this, sensibly, helps potential token acquirers and participants in the ecosystem understand the token’s utility and value. On the other hand, “too early” detailed tokenomics preclude the ability to A/B test and refine economic loops. In the absence of refinement methods, the risk of sub-optimal economic performance rises.

Halo can play an important role in acting as a proxy for future tokenomics. By A/B testing different methods to accumulate Halo, fine tuning the reward loops and achievement events, the designers of the economy can include the nascent community in better understanding motivation and rewards. Participating members accumulating Halo during these initial phases can then be rewarded with future airdrops of the token upon issuance, reflecting the work and value they provided in contributing to the design of a healthy, circular token economy.

Furthermore, Halo can diversify the qualifications to participate in an ecosystem’s DAO. Current DAO models emphasize staking tokens as the entry price for governance rights. In the context of Halo, DAO participation can become diversified, by blending criteria that related to staked tokens and qualified Halo events. This distributes power from “whales” and “plutocrats” to a broader, more representative cross-section of the community. In turn, a more inclusive, diverse, democratic apparatus could lead to healthier, more representative decisions by the DAO. Hostile actors would be less capable of undermining decision making by simply accumulating the primary governance token.