Tokenomics and blockchain fragmentation
Hyun Song Shin
Abstract
This paper examines the structural risks of blockchain fragmentation, specifically focusing on how tokenomics influences the cohesion of digital asset ecosystems. Shin argues that the proliferation of disparate, interoperable-challenged chains creates inefficiencies that hinder the development of a unified digital currency or ledger system. The methodology utilizes macroeconomic modeling to trace the relationship between token incentives and capital allocation across various chains. Findings suggest that excessive fragmentation serves as a barrier to institutional adoption and liquidity. The paper highlights the trade-off between chain-specific economic incentives and the broader need for global settlement layers, suggesting that current tokenomic designs may inadvertently exacerbate rather than mitigate systemic risk. It serves as a critical examination of how market-driven fragmentation challenges the original promise of a singular, borderless blockchain value layer.
Key Findings
- 1Fragmentation reduces liquidity and efficiency in the digital asset ecosystem.
- 2Token incentives often encourage chain-specific growth at the expense of network-wide interoperability.
- 3Current tokenomic designs risk creating silos that hinder institutional trust.
- 4Macroeconomic stability in crypto depends on reducing friction between disparate ledger systems.
Topics
Citation
BibTeX
@misc{tokenomicsand2026,
title = {Tokenomics and blockchain fragmentation},
author = {Hyun Song Shin},
year = {2026},
howpublished = {\url{https://www.bis.org/publ/work1335.pdf}},
}Knowledge Explorer
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