​Three Token Darlings, and What They Say About Crypto Now

Enzo Villani  |

Three tokens that have been consistently garnering attention in the crypto space are NEO, OMG and Dash.

Each has been doing so for their own reasons, but as a collective, they also provide a pretty good illustration of three emerging use cases for tokens today, while putting on display examples of what crypto is getting right. They also incorporate three different aspects of crypto that we’ve built in to the Swarm model, which further validates the multifaceted functionality of the platform.

First, let’s look at each of these players do.

NEO

Described as the Ethereum of China, Neo uses smart contracts to help facilitate transactions between users. That means it goes a step further than the so-called “dumb” blockchain of bitcoin’s distributed ledger, which simply allows users to send tokens to each other proactively.

On Neo, as on other platforms that use smart contracts, users can tell the system to transact only after certain conditions are met, say, when a package tracking app confirms that a product has been shipped, or when a GPS tag verifies it has reached its destination. Whatever the users agree to as the terms of the smart contract, Neo will send coins only when those preset triggers have been met.

Neo recently got a good deal of press when it received an A- grade – the highest of any cryptocurrency thus far -- from Weiss Ratings, a widely respected investments rating agency.

But Neo takes its smart contract model a step further. Because generating those smart contracts takes up resources on the Neo network, users must pay for that resource using the platform’s GAS tokens.

Think of it as a subscription fee, or a pay-as-you-go model, but NEO tokens can be staked to produce GAS tokens, which are then used as fuel on the platform, to pay for computational resources or deployment of smart contracts within the NEO network.

Neo’s two-tiered token token model represents something that’s becoming more common on crypto platforms today – namely, multi-tiered token frameworks that allow users to transact with one token, while using another to pay for access to, and use of, the platform itself.

It’s similar to the structure we set up at Swarm, where our SWM token gives holders access to the network, and acts as gas for transactions. But the actual transactions are carried out with tokens built on the SRC-20 compliant security token standard, which are minted by and used within the individual funds and opportunities on Swarm.

OMG

With its motto of “unbank the banked” the OmiseGO Blockchain takes the traditional crypto model and turns it on its head. One of the benefits of bitcoin and other cryptocurrencies is that they give individuals in “unbanked” countries – those without developed banking systems -- an opportunity to participate more easily in the global economy.

But the OMG platform is built on the philosophy that any currency – whether fiat or crypto – should be able to move seamlessly between people and across borders, without the need of a financial institution at all, such as a bank.

By creating a digital wallet that can store any currency, regardless of type, the OmiseGO Blockchain could serve as a safety deposit box and digital currency exchange, in one. Someone in the U.S. could travel to Europe and pay for their coffee using the OmiseGO Blockchain, and have dollars deducted from their account, while the café gets paid in euros, but without any stiff international transaction or exchange fees.

In other words, OMG wants to make it easy for people with or without bank accounts to use their money, however they want, with other people, regardless of which currency they hold, and without having to go to or through a bank to access it.

Built by Thailand-based online payment provider Omise, which is a PayPal-like firm, the platform anticipates the participation of its users to help make the platform better, and even incentives them for doing so. For example, OmiseGo acts as a decentralized exchange, liquidity provider, clearinghouse messaging network, and as an asset-backed blockchain gateway.

But because Omise won’t actually own the OmiseGo network – it will be truly decentralized, and open to anyone – users will provide those types of services on the platform itself, with incentives built in for large token holders to earn more tokens to secure the network.

This type of self-perpetuating service model is also another common thread that we’re seeing emerge in the crypto-space today. Namely, with decentralized hubs ultimately not being “owned” or run by any single entity, more crypto models are turning to their users to run and maintain the network, while rewarding them with additional tokens for doing so.

This is the same type of model that Swarm Fund is using to incentivize service providers to develop apps to benefit the platform and community, while being rewarded with SWM for doing so. Moreover, the Swarm Network is built to be governed and operated by the community. Swarm provides the picks and shovels, and the legal and regulatory framework, and gets out of the way. #nomiddlemen

DASH

The Dash network has ambitious aspirations to behave like actual money. Instead of the wild fluctuations in price that have largely voided the use of cryptocurrencies as tender for the exchange of goods, Dash’s goal is to maintain a more stable valuation, so that it’s actually useful as a form of payment.

It will do so by using master nodes on its network, and rewards users who provide both network resources and perform work to push transactions across the platform more quickly. That means users will be rewarded for developing tools to optimize the system, and for maintaining specific uptimes on network hardware.

Beyond the technology, though, since Dash’s decentralized governance and budgeting system makes it a decentralized autonomous organization (DAO), which means it will be governed by its users, who will be rewarded for taking part in and helping decide issues within the system.

This is the third trend we’re seeing emerging in the crypto space today – self-governing, self-healing systems which evolve with the users who join the base, and make decisions as a collective, based on their stake in the network.

At Swarm, we’re using liquid democracy and proof-of-participation to incentivize people to vote on issues that are important to the platform as a whole, and earn SWM tokens for doing so.

SWM

The three emerging models we’ve outlined here – multi-tiered token ecosystems, user-generated services, and decentralized, incentivized governance – are becoming signature aspects of some of the most innovative crypto ventures today. All three of these projects influenced Swarm, and the mechanics of the SWM token.

By looking for these successful models, and asking how each aspect helps the users of a given platform, as well as the platform itself, you have a good tool for gauging which projects today are getting crypto right.

Guest Writer Philipp Pieper, CEO of Swarm.Fund

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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