5.1.5 Basic Principles of Tokenomics

Decentralized networks are systems that allow users to interact and share information without relying on a central authority or intermediary. However, decentralized networks cannot function properly without some form of incentive or value exchange mechanism, such as an internal token or a non-fungible token (NFT). One of the main challenges of decentralized networks is the problem of coordination and cooperation between participants. Without a common goal or reward, users may act selfishly or maliciously, resulting in inefficiencies, security risks, or network disruptions. For example, in a peer-to-peer file-sharing network, users can download files from other users without contributing any files or bandwidth themselves, leading to a free rider problem. Similarly, in a blockchain network, users may try to manipulate the consensus mechanism or attack the network to their advantage, resulting in a 51% attack or a double-spend problem.

To overcome these challenges, some decentralized networks use internal tokens to align users' incentives and interests. Internal tokens are digital assets that are native to the network and can be used for a variety of purposes, such as paying for transactions, rewarding validators, managing the network, or accessing services. NFTs are unique and indivisible tokens that represent the ownership or identity of digital or physical assets, such as artwork, music, collectibles, or domain names. Both native tokens and NFTs can create value for the network and its users by enabling exchange, scarcity, utility, and governance.

Embarking on the exploration of the tokenomics within the DGT Network unearths a framework where various businesses converge, providing services to a shared target market while navigating through the consumptions of both financial and labor resources. This intricate network, grounded in both the provision and consumption of services, is propelled by a pivotal element – tokens. In this sphere, tokens not only act as a medium of exchange but also emerge as a representation of various components of value within the network. Let's delve deeper into the quadrants that compose the token value within DGT:

• Infrastructural Value: A foundational pillar that sustains the network by underpinning the nodes and network servers crucial for executing transactions, data exchange, and overall network maintenance. The transactions, imbued with their respective fees, reciprocate the infrastructural expenditure, thereby perpetuating a self-sustaining mechanism within the network.

• Data Value: Cascading through every transaction and perpetually stored within the distributed ledger, data emanates as an invaluable asset. The utility and relevance of the network are proportionally augmented with the usefulness and quantity of data harbored within, creating a repository that elevates the network's collective utility and appeal.

• Service Value: Superimposed on the foundational network infrastructure, various services and application systems not only enhance the utility of the network but also weave an intricate relationship with the data coursing through the system. Their implementation and operation, tethered to the system’s data, fortify the network's overall value proposition.

• Audience Value: A crescendo of network participants, through their engagement, token purchases, and utilization of services, infuse the network with utility, creating a synergetic effect where the collective value supersedes the sum of its parts. The dynamism brought forth by the influx and transactional activities of users amplifies the network’s vibrancy and viability.