U probably been f*ck by tokenomics somehow
U probably been f*ck by tokenomics somehow
Tokenomics is a chess game, the battle between you, project team & VC
Have u ever bought a good project but price never reflected it?
u probably got fked by tokenomics
Tokenomics is a chess game, the battle between you, project team & VC
Heres my "Tokenomics Framework"
Quick 3mins read from my 4 years of learning, trust me bro is good
In crypto people like to throw keywords at u like
deflationary! 3,3 !! duo token!!! trible token !!!!
these are all smoke screen to fomo u
3 Key things to understand so u aren't the exit liquidity
1️⃣ Token Demand & Supply
2️⃣ Token Distribution
3️⃣ Token Dynamic & Vesting
1️⃣ Token Demand & Supply
Who is buying n how much is there to buy,
More buy power n less tokens to buy, number will go up.
🔹What is the Utility of token?
🔹Does it capture the protocol value?
🔹How much buy power can the utility drive?
🔹is it quick short term demand only?
E.g. launchpad tokens, people rush to buy to access good ido but dump it as soon as the quality of the project launching drops
🤡put numbers into "utility" most features sound cool but in reality doesn't drive enough hard demand to support the price
❓Whats the supply of the token
Is it fix, inflationary or deflationary?
a lot of project claim to be "deflationary" but the only thing they deflate is price n fart.
🤡Put some numbers to it, most uility driven deflationary won't even take out 1% of total supply lmao
2️⃣ Token Distribution
Projects uses different terms, team, early contributor, marketing, treasury.
again, back to basic. just ask urself who is holding the tokens.
🗣️Project team
🗣️Seed investor
🗣️Secondary buyer
🗣️Protocol incentives
Don't let those different name confuse u, in the end is just these 4 guys
Who is holding the most?
What did they pay to get these shares?
How would they trade the token?
e.g.
Without naming projects, a lot of dex's "protocol incentives" might hold the highest tokens and if u are a buyer or seed investor u will have to take part in protocol activities to make sure u don't get diluted.
or be the farmer to dilute them kek
Dirty tricks team can do with tokenomics
"airdrop" or "incentives" actually drops to their wallet
"advisors, marketing, partnership" is a blackbox,
"mint NFT for tokens"
indirectly raising another round
3️⃣ Token Dynamic & Vesting/emission
A lot of tokens like to have various factors that can affect it's preformance such as staking, burns, lockups, taxes
E.g.
Like $grail from camelot has a 180 unstaking or 15days unstake but 50% of the grail will be burnt.
If they are on chain u can probably find a dune dashboard or ping me about it
🫵if u are buying that token at least understand it's game rule!
❓Why is vesting/emission improtant
Are u gaining more % of the protocol or getting diluted?
if someone else is getting more % of the token are they selling it? or staking it for even more emission reward and protocol revenue?
Using $Looks as example
Airdrop was 80% of the initial mcap, but only 25% of the mcap 6 months later.
If u decided to just hold the airdrop, even if the price went up u are technically diluted "owning" less of the protocol.
If u are thinking as an investor u have to think in
what is the total worth of the protocol
+
the % u own in the protocol
Good thing about tokens is that u can also take part in different activities to earn more % such as volume reward staking reward in $looks
Tokenomics is like chess,
Its a battle of Project team, Seed investor, Secondary buyer, Protocol incentives
U have to seeing who getting more tokens, is the protocol value going up overall?
If the token undervalue what is the best way to accumulate or if its overvalued can u sell before other players has more tokens?
Always remember people value & react to things differently in bear/bull markets.
I have been awfully sick for the past two weeks and couldnt focus to write more. getting back online more now, to the ones that notice i haven't been posting n sent ur regrads, thanks again.
lambro felt the love
Till next time!