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Tokenomics Design

Tokenomics distribution and flow analysis.

Mantra

Communities create tokens, tokens don't create communities.

Metrics​

Understand the balance and flow of protocol supply vs demand from fundamentals.

  • Supply & Demand
  • Maximum & Circulating Supply
  • Inflation
  • Deflation
  • Rule of Thumb for Inflation
  • Market Cap
  • Unit Bias
  • Fully Diluted Value
  • Trading Volume
  • Initial Distribution
  • Vesting Schedule
  • Current Distribution
  • Demand-side Tokenomics
  • Token Utility
  • Financial Incentives
  • Growth & Marketing Allocation

New Token Launches​

Token Generation Events.

The trend of extensive private fundraising and inflated valuations has made many new token launches unattractive for public investors, as the potential upside has already been captured by insiders before the token is publicly tradable.

Key Insights:

  1. The majority of upside for new tokens is now being captured privately before the public launch.
  2. Founders are accepting private deals that inflate their personal wealth without requiring market validation.
  3. Private investors ("team players") who get in early often end up being net negative for the project.
  4. The privatization of price discovery and inflated valuations from VC markets have made many new token launches uninvestable.

Key Terms:

  • Low float, high FDV: Refers to tokens that have a small circulating supply (float) relative to their fully diluted valuation (FDV). This can lead to price volatility.
  • Private capture: The phenomenon where private investors capture most of a token's value before public launch, leaving less upside for retail investors.
  • Phantom pricing: Unrealistic valuations assigned to tokens based on private deals rather than market demand.
  • Team players: Private investors who get into a project early, but often provide little value or even have a net negative impact.
  • Price discovery: The process of determining the market price of an asset through trading between buyers and sellers. This is increasingly happening privately for new tokens.

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