An abridged version of The Super Token Thesis was originally published by Hackernoon. You can read it here.

Before you start, make sure you check out Part I: The Dream

Now that the why behind the Super Token has been established, we must answer the question of how we get there.

In the past, countless L1s and L2s have arisen that remain niche market plays in anticipation of a future that may never arrive — one new chain monopolizing a meaningfully large market. Going for that extra 5% (or even 10x) transactions per second isn’t the long-term play. Neither are fixed number designs or the more mainstream method of copy-and-pasting architecturally inefficient designs.

The case for blockchain in general stands on three pillars: self-sovereign custody, censorship resistance, and immutability of history. The aforementioned cannot be traded off for scalability, which entails that horizontal scaling (adding more of the same thing) will not come naturally. Moreover, regardless of what type of infrastructure we plan for, extensibility is going to be key. While it’s impossible to predict what we will need to plug into the network in the future, the need for the capacity to do so is clear. In an ideal world, extensibility would be facilitated by trustless cross-chain connectors with heterogeneous interoperability.

Thinking of the Super App, there are three infrastructural layers: the ledger, the access layer, and the financial machinery. All three potentially aggregate and abstract away layers of complexity on the back-end from the consumers.

*Diagram 4 | There’s No Such Thing as “Too Much Infrastructure”*

Ledger

The ledger keeps the tokens and the smart contracts, preserving the three key properties we mentioned above. The ledger could be a network of different L1s and L2s connected with trustless bridges with some additional notion of shared security. Or, in a perfect world, it could be one super-scalable ultimate L1.

Access Layer

The access layer consists of nodes and indexers, providing tamper-proof access and historical aggregation, both to the end-users (e.g. to user wallets) and service applications (e.g. arbitrage bots). The access layer is the closest we can get to an established world of high-load Web2-era software: after the index is built, it can be replicated for the purpose of horizontal scaling without much trouble. Eliminating centralization bottlenecks in chain history storage, node access, and event scrapers is a task for the near future, with projects like Pocket Network leading the charge.

Financial Machinery

Finally, financial machinery hides away conversions between internal assets, much like how the derivatives market (on a good day) fills the role of de-risking businesses and industries and increasing overall capital efficiency. The existence of the Super Token does not mean application tokens don’t have a place; it simply obscures the presence of said tokens from the user. This layer exists on an intersection of finance and engineering, unifying pricing functions, automating token conversions, and building in derivatives and hedges in order to provide an integrated end-to-end experience.

At its core, infrastructure is what gives a token value. If the hub is successful at capturing certain traffic and user engagement, then their token may become super if it facilitates usage of that infrastructure in a meaningful way (preferably for both the suppliers and consumers of goods and services going through the hub). A conglomerate of user-facing applications would be incentivized to collectively invest into public goods infrastructure that benefits everyone at the end of the day.

Doing away with the vision of users holding dozens of utility tokens, we enter the realm of payment mechanisms that can take a user from a fiat/major crypto entry point straight to receiving utility from the app, without additional steps and crippling fees added on top.

*Diagram 5 | GTA (Governance Tokens Accelerated)*

At this point, it should be clear that the goals of a Super Token are not fundamentally different from that of any successful utility/currency. Who recognizes its value? Who is willing to exchange their goods/services for it? What are the chances it loses all of its value overnight (worst even, for good)?

While these questions seem like high school economics topics, it’s clear that fundamentals have been forgotten and that sobriety is the scarcest resource among projects and their token designers. Certainly, a pumpinomics shill to make a couple million dollars overnight may be a hilarious, memorable blast–just like a drunken, debauched night with your friends–but let’s not pretend that’s a sustainable way to live the rest of our lives. To focus and build protocols and businesses that last the generation, we need to tune out the noise and stick to historically validated fundamentals, where we can look back on the wildly successful Web2 era for inspiration. Stay tuned for our future piece: Tokenomics 2.0, where some of our newly researched token mechanisms can be applied to all kinds of high-usability tokens!

Part III, the final chapter of The Super Token Thesis is coming soon: GRAND CONSOLIDATION. Stay tuned…

Public Keys

The Super Token Thesis, Part II