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138 lines
2.7 KiB
Markdown
138 lines
2.7 KiB
Markdown
## 🍿 tokenomics for defi projects
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<br>
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### tokenomics factors
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<br>
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* math
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* supply vs. demand
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* incentives
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* value accrual
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* human behavior & game theory
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<br>
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----
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### main questions
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<br>
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* How many tokens are in existence?
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* How many tokens will there be in total?
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* Who has the supply? WHEN can they sell?
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* How will the supply change over time?
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* What are their policies for changing?
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<br>
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---
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### concerns
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<br>
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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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### supply metrics
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<br>
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* Supply: How many tokens exist NOW
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* Max supply: The most that can exist
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* Market Cap: Current Price * circulating supply
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* Fully Diluted MC: Price * max supply.
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<br>
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* for example, it's not a good sign that a circulating supply was only at 40%. That means the supply will increase by 60%.
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* More coins created will put pressure on the price.
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* another example, Dogecoin is an inflationary token: its supply is increasing each year, and there's no CAP on the supply.
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* this isn't good for Tokenomics because it's the opposite of Scarcity. Some coins can become deflationary when the supply DECREASES over time.
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<br>
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---
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### allocation & distribution
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<br>
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* how are the initial tokens distributed? There are roughly 2 ways:
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<br>
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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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<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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<br>
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---
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### what drives the demand
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<br>
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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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## on projects
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* [dydx tokenomics](https://docs.dydx.community/dydx-governance/start-here/dydx-allocations)
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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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<br>
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