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👾 MEV extraction can be a force of good in a non-predatory blockspace free-market as an incentive for economic security.

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tokenomics/README.md
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## 🍿 tokenomics for defi projects
### projects
* [dydx tokenomics](https://docs.dydx.community/dydx-governance/start-here/dydx-allocations)
* [redacted cartel tokenomics](https://tokenomicsdao.substack.com/p/tokenomics-101-redacted-cartel-btrfly?utm_source=substack&utm_medium=email)
* [readacted university](https://redactedcartel.notion.site/redactedcartel/REDACTED-UNIVERSITY-0dba7e10e6fb476a8ee7d2cb70fcfb1f)
<br>
---
### supply
* **Circulating supply:** How many tokens are in existence (in the market)?
* **Max supply:** How many tokens will there be in total?
* **Total suppply:** all tokens already issued minus the ones that were burned/locked.
> If the circulating supply is low while the total and max are high: red flag as the value of your coins will get diluted away (more coins created will put pressure on the price).
> The monetary policy in crypto dictates whether a coin is inflationary or deflationary and by how much, as well as the overall consensus mechanism for the project.
<br>
---
### liquidity and valuation
* **Fully diluted valuation:** How will the supply change over time?
* **Market cap**: Current Price * circulating supply
* **Fully Dilute:** Market cap: Price * max supply.
<br>
---
### distribution
* **Holders**: Who has the supply? WHEN can they sell?
* **DAOs/project research**: What are their policies for changing?
> A good distribution design is when no single person or group holds a large amount of the coin, instead, it’s distributed among many individuals.
* how are the initial tokens distributed? There are roughly 2 ways:
##### 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>
<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>
---
### concerns
* 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>
---
### what drives the demand
* 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)
* [The Reverse Liquidity Bootstrapping Pool](https://tokenomicsdao.substack.com/p/the-reverse-liquidity-bootstrapping)