Fishcoin: Early Lessons in Tokenizing Social Impact Part II
“How can we incentivize data sharing in fragmented seafood supply chains that often begin (almost 90% of the time) in the developing world?” -Fishcoin
Supply chains are networks, and when networks are managed via a token that incentivizes desired behavior and dis-incentivizes undesired behavior, that network has now become a tokenized ecosystem.
“Tokenization” is a term that will become increasingly familiar as blockchain technology permeates societies. This is partly due to the fact that a primary benefit of using blockchains, and one of the primary reasons to use one, is to create new ways for individuals to transact with each other without the use of a trust agent . Once these trust agents are not needed, new possibilities emerge to create new forms of value within bootstrapped economic ecosystems like seafood supply chains. Or, as was demonstrated in the last post, when there is no trust agent, tokens can fill the vacuum with a trusted ledger upon which to transact across regulatory and geographic borders.
But none of this happens without a token because the token provides the governance for the new economic ecosystem
The Fishcoin is a Token that Governs
Fishcoin is a digital token that manages the Fishcoin ecosystem through a series of rules that incentives desired behavior and dis-incentives bad behavior. Hence the Fishcoin ecosystem is actually a tokenized microeconomy that is self-regulating.
The Fischcoin tokenized micro economy is comprised of actors and the decisions they make either leading to the desired outcomes or not. For Fishcoin these actors and their decisions can be oversimplified:
Incentivizing the Desired Behavior that results from Decision-Making
This table is a gross oversimplification because each of these decisions is the result of complex dynamics between interests and incentives which could shift to some degree day to day. Relatively speaking, the Fishcoin ecosystem is simpler in relation to the visions for some Decentralized Autonomous Organizations (DAO’s) managed on a blockchain but that is a post for another time. The degree of desired behaviors performed in the Fishcoin ecosystem, and the efficiency to achieve these behaviors, are the ultimate measures of performance for the token that manages it. This will be the objective of the adaptive management to improve the token as a tool in the larger intervention.
All social ecosystems incentivize desired behavior and disincentives un-desired behavior through laws (i.e. rules) and correlated punishments for violating them and rewards for adhering to them. The same goes for the Fishcoin ecosystem.
Rules of Fishcoin
One of the game-changing benefits of blockchain is that it simplifies managing complex ecosystems because it solves some of the problems that usually requires massive resources to address through regulations and enforcement. One problem being the lack of sufficient trust to transact with unknown supply chain actors.
Blockchain solves trust through encryption, alleviating the need for trust agents, and other problems like transparency and double-spending. Some of the problems addressed by Fishcoin, like fragmentation of the market due to lack of a trust agent with enforcement capacity, is solved just by applying the technology of the blockchain. We hope to do a post that goes further into “trust problems” (i.e. problems frequently encountered in social impact work that stem from a lack of trust in some way, shape or form).
But for here it is important to understand that because Fishcoin uses a token to manage its ecosystem, it does not have to worry about incentivizing those behaviors already automated through the use of a blockchain token. For example, previously supply chains had to worry about double counting of assets, a behavior that is impossible when the supply chain is managed by a blockchain. Supply chains experience significant theft and leakage, behaviors that are made much more difficult when a blockchain is used.
Hence the Fishcoin ecosystem has to account for fewer desired behaviors in its design and adaptive management. This simplifies the requirements on the governance system captured in the token and the adaptive management framework to improve it over time.
Token Utility Frameworks: Building on the Fishcoin Experience
Fishcoin is an innovation that helps to outline a way forward in taking the benefits of tokenization to scale, specifically the need for new due diligence protocols, the skill sets to implement them and tools to facilitate the process. Moving forward requires collaboration to mature the below Token Utility Framework components.
Problem Typology: The social impact sector has spent significant resources in building a evidence for what does, and does not work. While this evidence has value for the design and management of social impact programs, many do not always organize the evidence around specific social problems. Many are organized by the technical sector of the interventions that supplied the evidence, while others just provide evidence searchable by various attributes. This is problematic if the use of tokens for social impact is to take problem solving approach but it does present an opportunity for rethinking how the social impact sector produces and organizes its evidence.
Token Typology: There are various efforts underway to create Token Taxonomies amongst blockchain developers and business actors to develop a sort of token menu for businesses to choose tokens that are most conducive to their business model. This is important not just because these efforts can provide initial lessons learned for developing future typologies, but since they are meant to manage business models, they are problem focused.
Adaptive Management Protocols: Measuring the effectiveness of token performance in achieving the desired behaviors inside the ecosystem will require an integration of Token Engineering, Cryptoeconomics, Monitoring & Evaluation and sector expertise (in the case of Fishcoin fishery management, supply chain logistics, etc.). However, the largest technical gap is the absence of behavioral skill sets that can inform the measurement of behavior change mechanisms and correlated incentive/dis-incentive structures. Without this behavior change focus, no token can be optimized and the larger intervention incurs a significant opportunity cost in meeting its objectives.
But even this initial Token Utility Framework is itself dependent on a new ethical framework that accounts for the unique attributes and transformative potential of blockchain technology.
Initial Ethical Principles: If blockchain is to be used at scale for social impact then a new ethical paradigm is urgently needed before the technology is mis-applied at larger scales. This paradigm must account for two interdependent ecosystems, one physical and one digital.
If we are talking about tokenized micro economies (like Fishcoin) that are 1.) governed by behavioral mechanisms and 2.) managed by the micro economies digital twin on a blockchain ledger, then we need ethical frameworks for each. This is a tall order but any responsible, and effective, utility of a token for social impact is dependent on it. There are already digital principles, communities of practice and evidence bases to build on but future ethical paradigms should be inclusive to the emerging Token Engineering and Crytpoeconomics fields.
