Intro to Tokenomics Resources

All you need to know about token economics (tokenomics). Supply, burning, monetary policy, token distribution, earnings and more!

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Intro to Tokenomics Resources

All you need to know about token economics (tokenomics). Supply, burning, monetary policy, token distribution, earnings and more!

web3, crypto, DeFi, economics

Refer to the “Education” section of Tokenomics DAO for the most up to date resources/articles on tokenomics.

Introductory Content

* All You Need to Know About Tokenomics

* Great starting point outlining the basics of tokenomics and overview of the key variables: supply, burning, monetary policy, token distribution and earnings

* An introduction to token economics (tokenomics)

* Similar level of detail to link above, but with a bit more detail on token distribution

* Tokenomics 101: The Basics of Evaluating Cryptocurrencies

* Breakdown of tokenomics through the lens of supply + demand as opposed to the underlying drivers (e.g. burning, monetary policy, etc.), with a high-level evaluation of Convex Finance

* Economics Design Youtube

* Lisa JY Tan’s channel on tokenomics. She’s also authored Economics and Math of Token Engineering and DeFi : Fundamentals of Token Economics

Sample Protocol Tokenomics Overviews

* Each example covers initial tokenomics, governing principles and the associated trade offs made when designing incentives compared to other protocols.

* NEAR Protocol

* Harmony One (Initial Token Economic Model, Updated Tokenomics, Economic Model)

* Florian’s substack

* Ethereum Tokenomics 2021: Impact of Eth2, EIP 1559, and L2 Scaling Solutions on Demand/Supply

* Slightly outdated, but helpful illustration of how changes infrastructure changes impact supply/demand dynamics for ETH (or another crypto asset)

Advanced Content

* https://ahitchhikers.substack.com/ - good deep dive substack on token engineering.

* Chapter 3: Cryptoeconomic Patterns - Value capture and distribution of protocols.

Tokenomics Evaluation Framework

Supply

Key Question: Based on supply alone, will this token hold or increase it’s value? Or will that value be inflated away?

* Total Supply

* How many tokens exist today?

* How many will ever exist? (eg is there a supply cap)

* Issuance rate

* Is the issuance rate fixed or variable?

* If variable, what are the factors that determine (and can influence) issuance rate?

* Allocation/Vesting

* How was supply initially allocated among investors, community, core team, etc? Are there any group(s) with a significant holding that could drive material selling pressure upon vesting?

* What is the vesting schedule for the largest holders?

Demand

Key Question: Why would someone hold this token?

* ROI

* Excluding any price appreciation, what is the return generated by simply holding the token? (eg staking)

* Is there an opportunity to earn additional return by yield farming?

* Are earnings/fees generated from the protocol distributed back to token holders?

* Does any “rebasing” take place as the protocol inflates?

* Rebasing works similar to a stock split, whereby holding and staking the token enables the holder to receive more, thereby offsetting any impact of inflation (eg % ownership remains constant)

* Community

* How active is their Discord/Twitter?

* Has an ecosystem fund been announced? Grants? Hackathons?

* How is the protocol actively working to drive additional community engagement?

* Do one-time + ongoing initiatives drive additional token demand?

* Lockups

* Is there a lockup program in place?

* If there is a lockup program in place, what is the incremental value of rewards and what are the requirements to earn those rewards?

* What % of total tokens outstanding are locked up?

* How much selling pressure is generated upon lockup expiration (and when)?

* Are there other non-monetary benefits to staking + locking up tokens? (eg increased voting power)

DAO Specific Content

* Incentive Design & Tooling for DAOs

* How to match a DAO's goals with the right incentive mechanisms to achieve them...

Intro to Tokenomics Resources
Info
Tags Web3, Crypto, DeFi, Economics
Type Google Doc
Published 17/09/2022, 23:56:03

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