Towards a Community Token Economy for manufacturing

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Towards a Community Token Economy for manufacturing

The problems described above are tackled by companies from various industries, from 3D printing to electronics, but also from various angles in their attempt to improve various portions of the value chain. However, this siloed innovation approach leads to duplication of work where there is a very scarce talent pool for the community to draw from. The combination of expertise in cryptography, smart contracts, and game theory is hard to find not only for blockchain startups but also for corporates. This leads to a waste of time, money and, ultimately, dilutes the community attempts to build better-decentralized systems, momentum and network effect [8].

To address the issues described above, we are proposing the Smart Manufacturing Industrial Cloud [SMIC] as the first Community Token Economy [CTE] for product development and manufacturing. CTE is a concept championed by Outlier Ventures and referrers to an alternative approach to individual research where otherwise competing teams, including startups and possibly incumbents, combine their efforts early on within a focused theme. This helps to create a common infrastructure to contribute towards quickly building a network effect and economies of scale through a collectively owned protocol and shared ‘Community Token’.

SMIC aims to optimize the pathway of the industrial community to realize an equitable, open source and a decentralized market for product design and manufacturing. Therefore, SMIC is not trying to centralize a decentralized economy through a top-down, rigid command-and-control structure, nor to duplicate existing efforts or technologies with the same goal. Instead, it attempts to provide a dynamic framework to incentivize collaborative behaviors early in the birthing cycle of these new digital manufacturing economies. Thus, all participants to the SMIC CTE are more likely to succeed, whilst simultaneously allowing for each group of participants to have the freedom to explore their own paths.

The SMIC CTE will be inclusive, building a reference point to which other companies that are part of the product development value chain can refer to. Initiating this in a manageable way requires pragmatism over dogmatism.

The starting point of SMIC CTE is represented by ‘MVC’, or ‘Minimum Viable Community’. This supports the concept of having enough participation from the industrial community in the CTE’s design and subsequent launch. This implies that parties are culturally aligned with the original mission. The focus is on those who can provide the most immediate value to the project and are well respected by their peers and have a high reputation.

The SMIC design is inclusive, but it also allows all parties to leave as easily as new ones can join with the approval of others, taking into account the contribution of each party and the appropriate risk to reward in the vesting tokens.

Fundamentally, SMIC introduces a business model innovation by creating a shared product development environment to reduce operating costs and promote the sharing of resources more efficiently.

The best way to think of SMIC is as a larger meta-economy with a series of complementary tokens interacting with one another within it. A first important distinction to make is the difference between the SMIC Community Token and various App Tokens within the system.

As an industry-wide initiative, the SMIC community members share the following goals:

  • A shared vision on the future of product development and manufacturing value chain
  • Reduction of inventory costs and service times by enabling just-in-time manufacturing for all the supply chain
  • Reduce the cost and accelerate New Product Introduction
  • Enable trading of manufacturing capacity
  • Eliminate the trust tax in the supply chain
  • Enable private and confidential contracts
  • Build towards the factory Distributed Autonomous Organization (DAO)

Download the white paper to read more about how to build the SMIC MVC.


[8] Outlier Ventures ( “Community Token Economies (CTE) Creating sustainable digital token economies within open source communities”, Version 1.0, September 2017 (


Radu DiaconescuThis article was written by Radu Diaonescu, an electrical engineer by trade having earned an EPFL (Swiss Federal Institute of Technology Lausanne) Management of Technology masters and honed his skills while at Honeywell. He is currently managing’s business development efforts and sits on the Board of Directors building the world’s next generation platform for agile manufacturing of electronics.