Tokenized Economies: Rewarding User Preferences
Blockchain technology has changed the way finance works. That’s a fact. However, it has also changed many other industries thanks to decentralization. We can talk about the supply chain, the medical industry or the automotive sector just to name a few.
Taking this into consideration, distributed ledger technology (DLT) is also making it possible for people to earn rewards for doing a wide range of things: from playing games to sharing data or watching videos. These possibilities that have been enabled by DLT are now being adopted by a large number of companies and projects.
Despite that, these projects need to have the necessary infrastructure to make these benefits available to users from all over the world. Tokenizing economies and rewarding users for doing different tasks requires networks, interoperability, security and scalability. This is where RSK is helping the entire blockchain industry move forward through its numerous solutions.
Tokenized economies became an important part of the entire crypto market. Hundreds of thousands of transactions related to these types of activities are being processed on top of different blockchain networks on a daily basis. The main question is: How far can this market grow?
In this post, we will explain how tokenized economies work and why they are so important. We will also explain how RSK is making it possible for different projects to develop and create new solutions that reward users for their participation.
Understanding Blockchain Rewards
Over the last few years, we have seen the expansion of the so-called tokenized economies in the blockchain market. Users are being rewarded with crypto tokens for doing various and diverse tasks.
To properly assess how the industry got to that point, we need to understand how distributed ledger technology was able to inspire projects and initiatives. Basically, blockchain technology allowed companies and businesses to launch their own tokens, creating a new type of economy known as tokenomics. This economy became very popular with the growth of Initial Coin Offerings (ICOs) in 2017 and early 2018.
Back then, it was difficult for some cryptocurrency projects to offer tangible use-cases to their tokens and that´s one of the reasons why proposals like DAICO arised.
Taking this into consideration, it took time for these projects to grow and reach a stable user base with rewards being distributed to users on a regular basis. Late 2020 and early 2021 were good periods in which these projects became known and analysts started paying close attention to them.
Therefore, tokenized economies might already have some years in the market, but blockchain rewards are relatively new to the crypto space. What do we really mean with a blockchain reward?
Blockchain rewards involve doing an activity and get paid for them with a local token. That means that a specific project would incentivize users to carry out some activities. The rewards would depend on the network and the engagement of the user. In some cases, the reward could be as much as an average salary in a developing country while in other cases it could be worth just dozens of dollars.
Taking this into consideration, the rewards would change according to different market conditions. There are play-to-earn blockchain-based platforms, data sharing projects and video games, among other initiatives that let you engage with tokenized economies.
One of the latest initiatives in the tokenized economy market is related to play-to-earn projects. These projects reward users with tokens to perform regular activities in different blockchain games. And of course, RSK is involved in making this possible thanks to NFTs on top of Bitcoin (BTC).
Play-to-earn games are blockchain games that reward users for the time they spend playing. Thanks to the implementation of non-fungible tokens (NFTs) it is possible for users not only to be rewarded while playing but also to get access to unique features and possibilities in terms of tokenized economies.
Basically, items and characters on blockchain games are owned by the users. That means that even if the platform stops offering support to the game, individuals would be able to have their blockchain items and hold them as long as they want. In just a few words: users become the owners of their assets and characters.
How does this relate to tokenized economies? Players spend long hours creating their characters, levelling them up and gathering some of the most powerful in-game items. For example, a user that played for 5 years the same game and became one of the strongest players can sell his character (NFT) for a considerable price. Shaping a strong character within a blockchain game can indeed be a very profitable investment.
Rewards can also be given to users in the form of tokens. If a user performs specific activities, they receive the tokens of the platform in which they are playing. Simply put, you get rewarded for just playing your favourite game.
Axie Infinity is one of those games that is currently rewarding users’ preferences. As reported by Fortune and many other news outlets around the world, Axie Infinity is currently allowing individuals in developing countries to have a blockchain-backed living wage. That’s only possible thanks to tokenized economies.
The longer the user plays and the more experience it gains, the easier it becomes to earn the token rewards. In this context, users receive the Smooth Love Potion (SLP) token, which can be sold to the open market and be exchanged for local fiat currencies and stablecoins. Users located in some countries in Latin America, Asia or Africa can receive as much money as an average salary (or more) on those countries. This is the revolutionary side of tokenized economies as they have direct social impact on emerging markets.
RSK Powers Play-to-Earn Tokenized Economies
RSK is playing a key role in powering tokenized economies and play-to-earn platforms. As we mentioned before, the advancement of blockchain technology and NFTs made it possible for users to own their assets. While in the past these items were owned by a centralized company, they are now owned by users.
RSK is building the infrastructure that helps the whole ecosystem to expand relying on Bitcoin´s security while at the same time enabling NFTs and tokenized economies as Coinsilium Group Limited is developing a revolutionary non-fungible token project that will set RSK to host a new marketplace for NFTs on Bitcoin.
How could an NFT marketplace on top of Bitcoin help tokenized economies?
Simply put, the larger the options available for individuals to sell their NFTs (in-game items or characters) the easier it would be for them to focus on the game itself. Knowing that there is a safe and large marketplace to sell their items and NFTs, users could focus on creating their characters, levelling up and searching for the rarest items.
RSK is also enabling users to manage their identity and reputation online using RIF Identity. RIF Identity is both a reputation and identity layer that provides self-sovereign identity protocols. RIF Identity is specially useful to users that value their rights and private data. They know that their information has a price and they don’t want to share it with everyone.
While getting rewarded for processing different tasks and carrying out different activities, users should also be in control of their data at all times. RIF Identity is making sure that users’ data remains secure and that their privacy is protected from unwanted viewers. Additionally, it empowers the user to manage its data. Individuals can easily decide who can view, share or get their information and reputation in exchange for a token.
Furthermore, RIF Identity can also be integrated with RNS. This decentralized domain service makes it possible for users to use simple blockchain-based domain names while at the same time enabling users to sell blockchain domain names for a profit.
Tokkenit is a clear example of how RSK is making it possible for companies to create new and unique solutions for the tokenized economy. Tokkenit is an application that runs on top of RSK enabling companies to create loyalty programs and reward clients with prizes and rewards. Thanks to blockchain technology, the Tokkenit application enables stores and customers to interact online in real-time.
Furthermore, they can also check their online reputation. Firms can decide to create their own tokens and reward users that interact or engage in specific activities. That being said, tokens have real financial value. The app is used by firms to create flexible and customizable membership programs that reward users for their engagement. Every single token created can be tracked and registered on the blockchain.
Tokkenit is just one of the many examples of how tokenized economies work and how RSK is making it possible for companies to create new and unique solutions for users in different jurisdictions. If a company wants to reward users with tokens, it is up to them to create their own reward program and issue new and unique tokens.
The cloud computing industry is also growing and being integrated into the tokenized economy world. Indeed, some new projects and initiatives are already providing services to clients in different countries.
RSK is also taking part in unique initiatives that aim at offering computing resources to numerous projects in the crypto industry. iExec and RSK have been collaborating for a long time in order to offer off-chain computing to Bitcoin applications.
The collaboration involves offering decentralized applications (dApps) scalable cloud computing resources.In simple words, both RSK and iExec are becoming the backbone of the Bitcoin ecosystem by allowing compute-intensive applications to get the necessary computing power they need to run efficiently hence enabling a new revenue stream for users willing to share their computing power.
The end-goal of this article was to discuss the current tokenized economy ecosystem and understand how this is helping the entire blockchain market to move forward and offer new and unique solutions to users that want to monetize their data, skills, computational resources, time, NFTs and much more.
On this context, RSK has become the backbone of a new ecosystem that is fastly growing on top of the Bitcoin network enabling end-users to monetize their preferences, resources and data in the most secure smart contract platform.