Work Tokens

Introduction

Work tokens are a classification of cryptoassets that provide the right to perform work in a decentralized network. Those looking to provide work have to stake the tokens by locking them in a smart contract until the work is finished. This disincentivizes malicious behavior since bad actors will have their stake slashed. However, upon successful completion of the work, the user gets compensated in either the native token or another token such as a stablecoin.

These tokens are unique in that they have a straightforward valuation model since you can estimate the dollar denominated payments for the service and discount them as you would any other business. Token holders who do not want to perform the work themselves can still participate in the rewards system by delegating tokens to third parties in what's known as Generalized Mining.

Suggested Reading

An (Entrepreneurial) Investor’s Take on the Utility of Tokens beyond Payment - Max Mersch

New Models for Utility Tokens - Kyle Samani

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