🍿 tokenomics for defi projects

tokenomics/README.md

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+## 🍿 tokenomics for defi projects
+
+
+<br>
+
+
+### tokenomics factors 
+
+<br>
+
+* math
+* supply vs. demand
+* incentives
+* value accrual
+* human behavior & game theory
+
+<br>
+
+----
+
+### main questions
+
+<br>
+
+* How many tokens are in existence?
+* How many tokens will there be in total? 
+* Who has the supply? WHEN can they sell?
+* How will the supply change over time? 
+* What are their policies for changing?
+
+
+
+<br>
+
+---
+
+### concerns
+
+<br>
+
+* The tokens were inflationary without enough utility.
+* Concentration of tokens by VCs & whales led to retail getting dumped on.
+* Understanding the market cap would show that it's impossible. 
+
+
+<br>
+
+---
+
+### supply metrics
+
+<br>
+
+* Supply: How many tokens exist NOW
+* Max supply: The most that can exist 
+* Market Cap: Current Price * circulating supply
+* Fully Diluted MC: Price * max supply.
+
+<br>
+
+
+* for example, it's not a good sign that a circulating supply was only at 40%. That means the supply will increase by 60%.
+      * More coins created will put pressure on the price.
+* another example, Dogecoin is an inflationary token: its supply is increasing each year, and there's no CAP on the supply.
+      * this isn't good for Tokenomics because it's the opposite of Scarcity. Some coins can become deflationary when the supply DECREASES over time.
+
+<br>
+
+---
+
+### allocation & distribution
+
+<br>
+
+* how are the initial tokens distributed? There are roughly 2 ways:
+
+<br>
+
+##### pre minted
+
+1.  The team distributes tokens to itself.
+2.  Distribution to insiders such as the team and venture capitalists
+
+In this case, VCs and Insiders could dump their tokens and cause a price crash. 
+Vesting means when they're allowed to sell the tokens. You want to make sure that the early backers are INCENTIVIZED with the protocol long-term.
+
+##### fair launch
+
+* 100% fair. Everyone has equal access.
+
+<br>
+<br>
+
+
+<img width="490" alt="Screen Shot 2022-05-31 at 4 10 16 PM" src="https://user-images.githubusercontent.com/1130416/171298450-9c18c98a-db92-41f7-baad-1e3a180fe924.png">
+
+<br>
+<br>
+
+---
+
+### what drives the demand 
+
+<br>
+
+
+* Utility (gas, fun, adoption)
+* Value Accrual (xStaking, governance)
+* The Memes and Narratives
+
+<br>
+
+---
+
+### resources and tools
+
+<br>
+
+* [cadCAD](http://cadcad.org/)
+* [Token engineering commons](https://tecommons.org/)
+* [Awesome cryptoeconomics](https://github.com/jpantunes/awesome-cryptoeconomics)
+* [Utility token price simulator](https://github.com/melonattacker/utility-token-price-simulator) 
+* [TokenSPICE](https://github.com/tokenspice/tokenspice)
+* [Tenderly](https://tenderly.co/)
+
+
+<br>
+