Overview
Cryptoeconomics is the foundational discipline of Web3. It combines computer science (cryptography) with economics (incentive design) to create systems that are secure, decentralized, and self-sustaining without a central authority.
Key Pillars
- Cryptography: Used to prove ownership, ensure privacy, and link blocks together (e.g., digital signatures, hashing).
- Economic Incentives: Using tokens and rewards to encourage 'good' behavior (like validating transactions) and penalties (like slashing) to discourage 'bad' behavior.
Goal
To design protocols where the most profitable strategy for every participant is to act honestly and follow the rules, ensuring the network's integrity.