diff --git a/tokenomics/README.md b/tokenomics/README.md index f306f6e..4070789 100644 --- a/tokenomics/README.md +++ b/tokenomics/README.md @@ -1,9 +1,7 @@ ## 🍿 tokenomics for defi projects - - -### on 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) @@ -13,80 +11,39 @@ --- -### tl; dr +### supply -#### tokenomics factors - -
- -* math -* supply vs. demand -* incentives -* value accrual -* human behavior & game theory - -
- ----- - -#### main questions - -
- -* 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? +* **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.
--- -#### 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. +### 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.
--- -#### supply metrics +### distribution -
+* **Holders**: Who has the supply? WHEN can they sell? +* **DAOs/project research**: What are their policies for changing? -* 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. - -
- - -* 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. - -
- ---- - -#### allocation & distribution - -
+> 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. @@ -100,31 +57,37 @@ Vesting means when they're allowed to sell the tokens. You want to make sure tha * 100% fair. Everyone has equal access.
-
- - Screen Shot 2022-05-31 at 4 10 16 PM -
+
--- -#### what drives the demand +### 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.
+--- + +### what drives the demand + * Utility (gas, fun, adoption) * Value Accrual (xStaking, governance) * The Memes and Narratives +
- - --- + ### resources and tools
@@ -137,6 +100,3 @@ Vesting means when they're allowed to sell the tokens. You want to make sure tha * [The Reverse Liquidity Bootstrapping Pool](https://tokenomicsdao.substack.com/p/the-reverse-liquidity-bootstrapping) - -
-