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2.3 Incentives

Economics 101 teaches that incentives are the backbone of consumer choices. Economics assumes that agents are rational decision-makers according to the incentives of their surroundings. Ethereum is designed in such a way to promote integrous behavior and punish bad behavior for a sustainable model.
Learning Objectives
  • Understand the basics internet bonds and practical uses
  • Be able to describe and assess economic implications of internet bonds
Reading List
Key Points
  • Web 3.0
    • the third generation of internet services
    • distinguishes itself from Web 2.0 with its developments in machine learning, artificial intelligence, enhanced security, decentralized structure, and advanced connectedness
  • Internet Bond
    • decentralized bond structure made possible through the advent of Web 3.0 and Eth 2.0
    • require a deposit of 32 ETH as collateral, creating a contract that promises rewards based on participation in the network
Review Questions
  • How are incentives aligned in Ethereum to promote good behavior and punish bad behavior?