Token Tales : A Theoretical Exploration of the Role of Tokens in Resource Allocation

We present a theoretical exploration of the role of tokens in resource allocation in small-scale economies with a static selection of goods and services. We derive the conditions for efficiency and fairness of the allocation of resources, and we discuss the implications of these conditions for the design of the token-based system. Our analysis suggests that token economics can be used to maintain a healthy small-scale economy, provided that the prices of the goods and services are set equal to their marginal cost and the number of tokens assigned to each participant is proportional to its welfare