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104 lines
3.0 KiB
Markdown
104 lines
3.0 KiB
Markdown
## 🍿 tokenomics for defi projects
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### projects
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* [dydx tokenomics](https://docs.dydx.community/dydx-governance/start-here/dydx-allocations)
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* [redacted cartel tokenomics](https://tokenomicsdao.substack.com/p/tokenomics-101-redacted-cartel-btrfly?utm_source=substack&utm_medium=email)
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* [readacted university](https://redactedcartel.notion.site/redactedcartel/REDACTED-UNIVERSITY-0dba7e10e6fb476a8ee7d2cb70fcfb1f)
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<br>
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---
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### supply
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* **Circulating supply:** How many tokens are in existence (in the market)?
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* **Max supply:** How many tokens will there be in total?
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* **Total suppply:** all tokens already issued minus the ones that were burned/locked.
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> 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).
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> 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.
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<br>
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---
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### liquidity and valuation
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* **Fully diluted valuation:** How will the supply change over time?
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* **Market cap**: Current Price * circulating supply
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* **Fully Dilute:** Market cap: Price * max supply.
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<br>
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---
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### distribution
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* **Holders**: Who has the supply? WHEN can they sell?
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* **DAOs/project research**: What are their policies for changing?
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> 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.
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* how are the initial tokens distributed? There are roughly 2 ways:
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##### pre minted
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1. The team distributes tokens to itself.
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2. Distribution to insiders such as the team and venture capitalists
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In this case, VCs and Insiders could dump their tokens and cause a price crash.
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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.
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##### fair launch
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* 100% fair. Everyone has equal access.
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<br>
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<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">
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<br>
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---
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### concerns
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* The tokens were inflationary without enough utility.
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* Concentration of tokens by VCs & whales led to retail getting dumped on.
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* Understanding the market cap would show that it's impossible.
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<br>
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---
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### what drives the demand
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* Utility (gas, fun, adoption)
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* Value Accrual (xStaking, governance)
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* The Memes and Narratives
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<br>
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---
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### resources and tools
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<br>
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* [cadCAD](http://cadcad.org/)
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* [Token engineering commons](https://tecommons.org/)
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* [Awesome cryptoeconomics](https://github.com/jpantunes/awesome-cryptoeconomics)
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* [Utility token price simulator](https://github.com/melonattacker/utility-token-price-simulator)
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* [TokenSPICE](https://github.com/tokenspice/tokenspice)
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* [The Reverse Liquidity Bootstrapping Pool](https://tokenomicsdao.substack.com/p/the-reverse-liquidity-bootstrapping)
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