Rewarding Mechanisms Based on Non-Fungible Tokens (NFTs)

‍Principal Investigators: Dr. Stefanos Leonardos & Prof. Carmine Ventre – King’s College London
Duration: 1 year

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Project Overview

This project explores the use of Non-Fungible Tokens (NFTs) as mechanisms for rewarding participation within digital ecosystems. By combining principles from tokenomics and game-theoretic analysis, it aims to define robust design principles for NFT-based incentive structures that enhance user engagement, transparency, and long-term sustainability. The research investigates how NFTs can function not merely as collectibles but as meaningful instruments for recognising and rewarding contributions.

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Objectives

The project will conduct a systematic literature review examining NFT reward systems across the domains of asset-pricing, tokenomics, and economic theory. It will identify and analyse key design patterns and incentive structures that characterise effective NFT-based reward mechanisms, and develop conceptual models for NFT reward systems while exploring their stability and equilibrium properties using game-theoretic approaches. The research will integrate economic, regulatory, and sustainability considerations into the design framework for NFT-based incentive systems.

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Ecosystem Development

This research contributes to the maturation of the NFT and Web3 ecosystem by establishing rigorous theoretical foundations for NFT-based incentive mechanisms. The game-theoretic analysis will help identify vulnerabilities such as gaming behaviours and market manipulation, thereby increasing trust in these systems. By integrating regulatory and sustainability perspectives, the project addresses growing concerns about environmental impact and legal frameworks, whilst expanding the utility of NFTs beyond speculation towards practical applications in community governance and value distribution.

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Expected Outcomes

The study will provide a comprehensive analytical framework for implementing NFT-driven incentive models across various digital platforms and communities. The results will clarify how NFTs can serve as effective tools for value creation and sustained participation in decentralised digital economies, bridging theoretical insights with practical implementation guidance at the intersection of blockchain technology and behavioural economics.

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