State of Tokens by William Mougayar - April 2018

Status of the Token Market
William Mougayar
Investor, Advisor, Board Member
Author, The Business Blockchain
Founder, The Token Summit and WMX
@wmougayar
wmougayar@gmail.com

Disclosures and Market Activities
•  Book (10 languages)
•  Token Summit
•  Blogging
•  WMX Blockchain Index
•  Tech Accelerators & VC
relationships
•  Knowledge websites
•  Strategic Advisory
•  Boards & Foundations
•  Startups Investments
•  ICOs participation
•  Cryptocurrency
•  Regulatory interactions
© 2018 William Mougayar @wmougayar

Blockchain Ecosystem
Startups
Researchers
Scientists
Crypto
Capitalists
Meetups
Hackathons
Infrastructure
Stakeholders
Developers
Enterprises
DRUMMERSDREAMERS DOERS

Staying True to Blockchain Fundamentals Is
EXTREMELY Important, but Often Forgotten
•  Replacing intermediaries
•  New (digital) Value liquidity
•  Proofs of X
•  Automatically enacting consequences
•  P2P infrastructures
•  Decentralized models
•  New protocols

Tokens 1.0 vs. Tokens 2.0
Copying what we see
vs.
Inventing what we don’t see

OLD
NEW
NEW
OLD
NEW
NEW
COMPANIES
SCOPE
Segmentation of
Implementations
?
✔
1.0
2.0
B2B

Tokens Jargon
Utility
Payment
Staking
Asset
Security Commodity
Air
Dropping
Locking
Burning

The point of attempting to
classify tokens is not to
better regulate them. It is
to better understand them.

The only Token that
matters is the one
being actually used.

Decentralization is
an unusual beast

Decentralization
On-Chain
0%
100%
100% IDEAL
?
?
© 2018 William Mougayar
@wmougayar
Reality

What is a token?
A unit of value that an organization
creates to self-govern its business model,
and empower its users to interact with its
products, while facilitating the
distribution and sharing of rewards and
benefits to all its stakeholders.

Token Value Proposition
By Whom will the token be
used; How; at what Cost; for
what Benefit; and Resulting in
what Valuable Transactional
Activity?

The killer app for the blockchain is
not tokens, but it is the creation of
private economies, new protocols
or development ecosystems.
Tokens are just enablers to that.

Blockchain circular economy disrupting
the value-work equation

On Token Economic Models
1.  Theory is always perfect, there
is no skin in the game yet
2.  Token functionality is being
abused
3.  We don’t know what we don’t
know

If you are thinking “Tokens”
1.  A token is not a carrot
2.  Token must be native to the
blockchain/App for maximum
leverage
3.  If not, proving the Token-to-
Market Fit will be more difficult

Token-to-Market Fit
is the new
Product-to-Market Fit

ACID TEST for Tokens
1.  What would happen without the
token?
2.  Why do you need a blockchain?
3.  What is the blockchain enabling
that wasn’t possible before?

Reality Check: Disconnect Between
Key Relationships
1.  Value vs. Valuations
2.  Monetary Policy vs. Economic Model
3.  Demand vs. Supply Drivers

There is no silver bullet for designing
token functionality or complying with
regulation.

What needs to work
What needs more work
What won’t work

What needs to work
•  Standards
•  Scalability
•  Interoperability
•  New exchanges / clearing houses
•  Native assets (creative, finance, physical)
•  Token types
•  Economic models

What needs more work
•  Killer features
•  Stablecoins
•  On-chain governance
•  Understanding economic models

What won’t work
•  Boil the ocean approaches
•  Head-on disruption
•  Leading with just white papers
•  Dressed-up websites
•  Cool ideas
•  Advisors that are not
•  No accountability to investors

Perfectly drafted ICO legal
terms do not increase a
startup’s chances of success.

Regulation is easier to
introduce, than to update,
correct, or remove.

What Should Regulators Do?
1.  Apply existing regulations
2.  Update existing regulations
3.  Allow Self-Regulation
4.  Create new regulations
5.  Freeze regulation with Safe Harbors
6.  Recognize a new asset class
7.  Harmonize global regulation
ü  Innovative
ü  More Difficult
ü  Easiest *
* for regulators

Current Regulation Landscape
1.  4 spheres: Asia, NA, Europe, Alternative
jurisdictions (Liechtenstein, Gibraltar, Malta, Cayman,
etc.)
2.  Balkanization of regulation is already here
3.  Competition vs. Harmonization
4.  Classification of tokens will be difficult

More Trends
1.  Separation of TGE’s between Public ICOs
and PPO’s
2.  Fiat liquidity jam due to cross-over friction
3.  Token exchange rights as an equity roll-
over
4.  New types of sub-tokens and token stability
5.  Build it before they come mandatory for
creating the utility

70%
30-40%
5-10%
Web Analogy & Where We Are
Web: Facebook, Twitter
Web: Internet, HTTP, HTML
Web: Java, Oracle, Microsoft

Selling the
Vision
Build-out
Installation
Deployment
Acceleration
Vision
Realization
2018-2020
2013-2015
2015-2016
2021+
2016-2018
2019-2021
Blockchain: The Evolution
We are here

My wish list for the Blockchain Economy
•  Easy APIs
•  Standards + their implementation
•  More consumer applications
•  More (traditional) governance
è More blockchain, less tokens

THANK YOU
William Mougayar
Investor, Advisor, Board Member
Author, The Business Blockchain
Founder, The Token Summit and WMX
@wmougayar
wmougayar@gmail.com
http://startupmanagement.org/blog

State of Tokens by William Mougayar - April 2018

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State of Tokens by William Mougayar - April 2018