Tokenomics That Work: Animoca’s Playbook for Governance and Progressive Decentralization

We sat down with Mo Ezeldin of Animoca Brands and Open Campus to unpack layered token design, post-TGE retention, progressive decentralization, DATs, and governance that works in real markets.

Key Takeaways

• Tokenomics is layered: utility, incentives, governance, GTM, and compliance. Each must reinforce the others.
• Post-TGE is where most designs fail; retention mechanisms must replace launch incentives.
• Progressive decentralization works when accountability leads and voting reputation accrues over time.
• DATs give institutions compliant exposure when they cannot hold tokens directly.
• Founders should vet “token economists” by shipped results, not price promises.

Animoca Brands has shipped more live token economies than most teams in the space. Mo Ezeldin, President of Open Campus and Head of Tokenomics at Animoca Brands, has a front row seat across consumer onboarding, governance design, and institutional interfaces. This article distills what actually works after the hype cycle and how teams can build systems that last.

“If incentives are doing the work of utility, you do not have product-market fit. You have a timer.”

Mo started as a high school mathematics teacher. In 2017 he fell down the crypto rabbit hole the hard way. He rode a bull market from five figures to seven, then watched it slide to four in nine months. That loss pushed him to study token design instead of price charts. In 2021 he joined Animoca to found the tokenomics function, drawing on his math background and a teacher’s bias for clear systems and measurable outcomes. That same education lens later led to his election as President of Open Campus.

Watch the Interview Here:

What are Tokenomics?

Mohamed quickly dismissed the “boring definition” of tokenomics as a simple supply-and-demand pie chart. Instead, he presented a more accurate and evocative metaphor: Tokenomics is an onion.

“The way I and [my] team think of tokenomics is actually it’s an onion. Outside of the fact that it makes you cry, it has multiple layers… That’s why I feel tokenomics is overlooked because it’s like opening Pandora’s box.“

The evolution of tokenomics has moved from rudimentary distribution schedules in the “2017 ICO boom” to the complex incentive, governance, and monetization structures seen today.

Mohamed’s definition is simple at the surface and practical in the details. Token economics begins with supply and demand, then expands into stacked layers that keep the system coherent.

• Utility. What job the product and token solve together. If a token does not help users get a job done better, faster, cheaper, or with access they value, adoption stalls.
• Incentives. Rewards should amplify real use rather than replace it. Publish a taper schedule and use incentives to accelerate learning, not to mask weak utility.
• Governance. Accountability first, decentralization second. Start with clear owners and fast shipping. As contributors grow, expand decision rights, budgets, and transparency.
• Go to market. Filter and graduate users. Free to staker to contributor to governor. Shape on ramps that convert attention into durable cohorts.
• Compliance and structure. Legal and custodial rails widen the addressable market. If institutions cannot hold tokens, give them a compliant path to participate.

Mohamed also traces the evolution from pie chart era to DeFi era to today’s layered approach. He calls out projects like Pixels that continue to iterate on staking, reward pools, and monetization to power a real flywheel rather than a one-time pop.

Token Launch is Only the Beginning

Mohamed’s analogy is clear. TGE is like childbirth. The trimesters are the run up, launch is the birth, and the real work begins the quarter after.

• Replace broad airdrops with qualified unlocks tied to meaningful usage milestones.
• Publish an emissions taper plan to reduce uncertainty and set expectations.
• Track retention, transactions per user, and revenue per user after rewards decline.
• Expect attention to spike around TGE. Measure who stays once the financial novelty fades.

Mohamed also flags a common trap. Exchanges often create misaligned incentives. Teams discover listing costs that can range from hundreds of thousands to millions. If true demand is not present, listings introduce short-term sellers rather than long-term users.

Tokenomics are All About Iterating

Another important topic covered in the conversation was the topic of iterating. Pixels is Mohamed’s example of iteration in the wild. The team adjusts staking, reward pools, and monetization loops to keep incentives aligned with fun and utility. The pattern is not a single perfect launch. It is frequent, public adjustments that keep the flywheel turning.

Open Campus shows that token design can be pointed at clear outcomes. Education has beneficiaries you can name and measure. As President, Mo brings a teacher’s mindset: incentives should guide contributors toward learning value, not surface metrics.

Warning on Fundraising with a Token

When asked about the fraught practice of using a token for fundraising, Mohamed offered a nuanced but cautious view. He stresses that the expectation needs to change: not every token will hit a billion-dollar market cap.

He identifies two distinct, viable paths:

1. Product First, Then Token: If a business is already generating revenue (Monthly Recurring Revenue, MVP, etc.), the supply/demand dynamics are clearer. The token then acts as a growth engine for user acquisition and attention. This approach drastically increases the likelihood of success, as seen with Hyperliquid, which demonstrated strong product-market fit (PMF) before its token launch.
2. Protocol First, Then Token: This is viable for massive, multi-faceted endeavors where a unified product is difficult, such as Open Campus. The token is used to build a community and fund the right partners and proposals (e.g., funding accelerators, content creators) necessary to tackle the enormous vertical (education) cohesively. This approach is much harder today, as many large verticals already have established players.

Token Listings Can Help or Hurt

Another practical lesson from the interview is the cost and timing around exchange listings. Marketing fees, advisory fees, deposits, and long timelines often surprise teams. If genuine demand is not already present, a listing can introduce short-term sellers rather than long-term users. Mohamed’s guidance is direct. List where your real users are. Do not pay for access that becomes immediate sell pressure.

The DAO Dilemma: Structure vs. Chaos

The interview also ventured into the failures of Decentralized Autonomous Organizations (DAOs). Mohamed contends that DAOs fail because they lack the structure, accountability, and reputation of a traditional business.

“Chaos breeds creativity, and it breeds great ideas, but at the same time, you need to find a balance between chaos and that structure.”

Popularity contests and weak reputation layers drain treasuries and stall outcomes. The path forward is progressive decentralization with real accountability.

Mohamed’s strong views on governance stem from his experience with ApeCoin governance systems. Around ApeCoin he pushed for upgrades to staking, participation, and accountability once products and ApeChain were in view. The lesson was tough. Without reputation signals and clear ownership, voting can become a popularity contest. Treasuries get drained, momentum slows, and late reforms struggle to pass. The fix is to build reputation and accountability early, then expand rights.

In practice, that looks like a sequence. Start with an accountable core that ships against public budgets and KPIs. Add working groups with scoped mandates and measured delivery. Delegate specialized decisions to sub DAOs with clear charters and reporting. Layer in reputation so voting power reflects proof of work, not only capital. It is decentralization as an outcome of earned trust, not as a day-one slogan.

1. Accountable core: A small team owns outcomes with public budgets and KPIs.
2. Working groups: Scoped mandates and measurable delivery.
3. Sub DAOs: Specialized decision units with charters and reporting.
4. Reputation-weighted participation: Voting power reflects proof of work over time. Delegates carry public scorecards and skin in the game.

“Decentralization is an outcome of earned reputation, not step one.”

Digital Asset Strategies as an Institutional Bridge

When mandates or custody rules block token ownership, Mohamed points to DATs or Digital Asset Treasuries. Institutions hold equity or shares in a vehicle. The vehicle holds the digital assets, handles custody and reporting, and channels value to the protocol. It widens aligned capital without breaking on-chain economics, and it fits the way treasuries already operate.

Founder Pitfalls Mohamed Keeps Seeing

• Treating TGE as the finish line rather than the moment accountability begins.
• Chasing exchange optics without defining who should own the token and why.
• Shipping governance with no reputation layer, then calling it decentralization.
• Taking advice as neutral when every stakeholder has different incentives.

Simple fixes: publish the plan, tie rewards to meaningful behavior, and make contributor work visible so reputation can compound.

Final Thoughts

Mohamed’s playbook starts with people, not charts. Build something users value. Use incentives to amplify that usage, not to stand in for it. Build governance that ships, then widen participation as reputation grows. Treat listings as distribution choices. Design for the quarter after TGE, because that is where fit is earned.

The conversation was a wake-up call: tokenomics is not just some financial game, but the very foundation of strategy and design for an organization. The industry is currently undergoing a painful but necessary metamorphosis: shedding the idealism of early, chaotic DAOs for a pragmatic, results-driven model.

If this content interests you, be sure to follow Arcanum Ventures on our social media channels. If you have questions about your fundraising or token design & economic modeling, and how to prepare your technology startup for success, reach out and speak with the Arcanum Ventures team.

About Animoca Brands

Animoca Brands is a Web3 leader that leverages tokenization and blockchain to deliver digital property rights to consumers, helping to establish the open metaverse and its associated network effects. Its operations span operating Web3 businesses, providing digital asset advisory services, and investment in over 540 companies across the blockchain space. The company has earned broad industry recognition and aims to create a new asset class and more equitable digital framework for the open metaverse.

Social Media Links 

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About Open Campus

Open Campus is a community-led protocol for educators, content creators, parents, and students. It puts decisions about learning back into the hands of educators and their students by fostering a collaborative environment, enabling teachers to create materials that match student needs. Open Campus empowers educators to earn recognition and revenue and claims to transform educational identity, credentials, and achievement through blockchain-powered tools and decentralized infrastructure.

Social Media Links 

Website | X | LinkedIn | Discord