The Banking Executive Magazine - September Issue 2022

• All categories of users on the plat- form STEP #4. ECONOMIC PLANNING Having comprehensive economic planning and governance mecha- nisms in place is essential. Platform economies may experience inflation- ary or deflationary pressures and are often prone to abuse by different types of users. Having a well-defined tools and strategies is important. The economic and governance systems will depend on the nature of the plat- form. STEP #5 STRUCTURE AND GOVERNANCE MECHANISMS A governance mechanism should be created for the platform. A lot of blockchain platforms have robust governance mechanisms where the community partakes in discussions before key decisions are made votes are cast regarding the direction that the platform will take. Governance decisions should be different from economic decisions, because lump- ing both together often results in abuse by well organized groups of users. STEP #6 USER BENEFITS & INCENTIVES Incentivizing users for higher en- gagement and rewarding them for being on the platform are two impor- tant growth strategies. STEP #7 BEST PRACTICES Best practices to create a virtual economy involve taking into consid- eration: • Core Interaction: The key to creating a virtual econ- omy is keeping core platform inter- actions at the heart of design and then building everything else around it. • Platform Design: Platforms are usually built accord- ing to certain design principles. The core business interactions of an application dictate what func- tions it should enable. • Iteration: Virtual economy design and man- agement is an iterative process. • Interoperability: Interoperability is a trend that is re- ally emerging in the world of blockchain platforms. Platform de- signers ensure interoperability of the platform with other worlds. • Accessibility: Making platform accessible to everyone reduces the friction of onboarding new users. • User interface: Simplicity in user interface design is a timeless feature, the impor- tance of which cannot be over- stated. • Design for Value Exchange Mechanisms: Value exchange mechanisms are the different ways in which users can exchange value. It could be through messaging or it could be by following another user. Design- ers should implement and embed value exchange mechanisms seamlessly in the virtual environ- ment. • Building a robust virtual economy: This involves recalibrating the vir- tual economy often, optimizing the platform, and communicating with users regarding changes, features and updates VIRTUAL ECONOMIES FOR BUSINESSES A lot of successful companies own platforms in which virtual economies exist. By creating virtual economies in a game-like environment for their users to interact and collaborate in, company platforms can experience rapid growth in their primary busi- ness activity. There are several benefits for compa- nies that create a virtual economy for their consumers to participate in. These include: ISSUE 165 SEPTEMBER 2022 the BANKING EXECUTIVE 15