The Death of FCoin: A Tale of Bad Token Design0.01

In general, we can categorize all tokens into two types: currency-like token and asset-like token. Most of the time, the two types of token cannot be mixed during token economics design. The price of different types of token is driven by different rules. The price of currency-like tokens is driven by supply and demand. When the demand is larger than supply, the token price goes up; and when the demand is smaller than supply, the price goes down. The price of asset-like tokens is driven by the value of the underlying asset. For example, if the token represents a company’s assets, similar to a company’s stock, the price goes up when the company’s assets increases in value, and vice versa.

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