Our technical analysis framework is designed to identify potential issues before they arise, so you can rest assured that your tokenomics model is robust and technically sound.
Includes
Unlocks and Supply shocks (MoM)
Token Release Schedule & Allocation (YoY)
Inflation (cummulative vs YoY)
Token Sale Breakdown
Soft Cap vs Hard Cap
Investors Rounds design
Relative Price Discount adjustments
Utilization of Funds
Unlocks and Supply shocks (MoM)
It's essential to carefully consider these factors when designing a tokenomics model for a cryptocurrency project. By carefully managing inflation, unlocks, and supply shocks, we help projects maintain the long-term value and stability of their tokens.
We've analyzed inflation and unlocks events from hundreds of tokens in our database, allowing us to gain valuable insights into how supply shocks and other economic factors can impact token prices.
Token Release Schedule & Allocation (YoY)
Inflation
Our experience and data-driven approach enable us to design tokenomics models that balance the demand and supply of tokens, preventing hyperinflation or deflation, and maintaining token value over the long-term.
The negative aspects associated with token inflation.
Dilution of Value
Inflation increases the total supply of tokens, which can lead to a decrease in the value of each individual token, as the market cap remains constant or grows at a slower rate. This dilution can discourage long-term holding of the token, as the purchasing power of the token could be eroded over time.
Sell Pressure
To maintain their relative share of the network, participants such as investors or Advisors might be incentivized to sell newly minted tokens in the market. This can create constant sell pressure, driving the price of the token down and potentially destabilizing the network's economy.
Inflationary Spirals
If token inflation is not managed properly, it can lead to an inflationary spiral, where the increased supply of tokens leads to a decrease in value, which in turn necessitates further increases in token issuance to maintain incentives for network participants. This feedback loop can ultimately result in a collapse of the token's value.
Centralization Risks
In some cases, high inflation rates can lead to centralization, as investors or other shareholders receive up to 30% of the total supply allocation. This can undermine the decentralized nature of blockchain networks, concentrating power and control in the hands of a few entities.
Speculative Behavior
High inflation rates can lead to speculative behavior and short-term trading, as market participants seek to maximize their returns in the face of decreasing token value. This can contribute to increased price volatility and instability in the network's economy.
Token Sale
We offer a comprehensive tokenomics design service for each round, tailored to meet the specific needs of the project vision.
We also design a Utilization of Funds strategy that outlines how the raised funds will be used to achieve the project's goals. This strategy is crucial for creating transparency and trust between the project team and investors.
Soft Cap vs Hard Cap
At the start of a token sale, we help the project set this two important thresholds.
The soft cap is the minimum amount of funds required for the project to be deemed a success and to proceed with its plans. If the soft cap is not reached, all funds are returned to investors.The hard cap, on the other hand, is the maximum amount of funds that the project aims to raise.
Investors Rounds design
We understand that different investor rounds have different needs and expectations.
That's why we offer a comprehensive tokenomics design service for each round.
Cumulative Token Funds Raised (per round)
Relative Price Discount
The relative price discount is an important factor in determining the perceived fairness of a token sale and can influence investor sentiment towards a project.
We focus on creating a fair and transparent token allocation structure that benefits all parties involved in some way. When designing the different rounds we make use of the vesting schedule release, lockup period, and TGE unlock to create a fair and equitable distribution and pricing structure.
Utilization of Funds
It's important to define a clear strategy for the utilization of funds in a crypto project because it ensures transparency, accountability, and helps build trust with investors.
Having a clear utilization of funds strategy can also help to attract more investors, as it demonstrates that the project has a well thought out plan for achieving its goals and creating value for its users.
