1) You've found a NEW project that ticks off all the right boxes.
- Awesome tech
- Strong team
- Great partners
But you discover the TOKENOMICS are trash.
A guide on the MOST important aspect of your research.
Read on 🧵👇
- Awesome tech
- Strong team
- Great partners
But you discover the TOKENOMICS are trash.
A guide on the MOST important aspect of your research.
Read on 🧵👇
2) People quite often forget that cryptocurrencies are quite different than other investment markets.
We often think we are investing in the project and company when we buy a token.
We don't.
Unlike traditional finance cryptocurrencies don't always represent the project.
We often think we are investing in the project and company when we buy a token.
We don't.
Unlike traditional finance cryptocurrencies don't always represent the project.
3) We are not buying the company shares of the project.
We are buying the TOKEN.
So not always is looking at the fundamentals of a project sufficient (tech, team, partners, revenue,...).
And this is where the tokenomics comes in.
Maybe the MOST important aspect of investing.
We are buying the TOKEN.
So not always is looking at the fundamentals of a project sufficient (tech, team, partners, revenue,...).
And this is where the tokenomics comes in.
Maybe the MOST important aspect of investing.
4) Tokenomics is the study of tokens.
- How they function
- Their intended use
- The elements to take into account.
It covers both the usability and supply of a token.
I'll sumn up the most crucial elements to take into account when analyzing the tokenomics.
- How they function
- Their intended use
- The elements to take into account.
It covers both the usability and supply of a token.
I'll sumn up the most crucial elements to take into account when analyzing the tokenomics.
5) TOKEN USE CASE.
What if the technology is awesome. Even say groundbreaking!
BUT for people to use it they don't need the token at all...
Would be awful wouldn't it? It would completely remove the value of the cryptocurrency.
And that's exactly where we invested in.
What if the technology is awesome. Even say groundbreaking!
BUT for people to use it they don't need the token at all...
Would be awful wouldn't it? It would completely remove the value of the cryptocurrency.
And that's exactly where we invested in.
6) Let's take a practical example.
Quant network (qnt) has a product called Overledger.
You could say it's the first blockchain operating system.
Like windows, macOS but on the blockchain.
Like a normal operating system it requires a licensing fee.
Quant network (qnt) has a product called Overledger.
You could say it's the first blockchain operating system.
Like windows, macOS but on the blockchain.
Like a normal operating system it requires a licensing fee.
7) What if you could purchase it with dollars?
Quant network could become a global success without ever given QNT as a token value.
Luckily the developers saw through this.
You are only able to purchase Overledger in QNT tokens.
There's is NO other way.
Quant network could become a global success without ever given QNT as a token value.
Luckily the developers saw through this.
You are only able to purchase Overledger in QNT tokens.
There's is NO other way.
8) QNT does more than just that btw but you get the picture. Was trying to make a point.
Believe it or not this does happen quite often where there's no token use case.
See the value in what you invest in and not just the project in general.
2 large differences.
Believe it or not this does happen quite often where there's no token use case.
See the value in what you invest in and not just the project in general.
2 large differences.
9) THE TOKEN SUPPLY
There's a difference between circulating supply in the market and the max supply.
Circulating supply is how many or "tradable" in today's market.
Price has usually found a price equilibrium based on this.
But what if the "tradable" supply changes?
There's a difference between circulating supply in the market and the max supply.
Circulating supply is how many or "tradable" in today's market.
Price has usually found a price equilibrium based on this.
But what if the "tradable" supply changes?
10) What if all of a sudden the supply increases?
Well it can... If the circulating supply is low compared to the total supply it means a lot of tokens are yet to be released and this adds sell pressure.
Without enough demand this is usually bad for price.
Well it can... If the circulating supply is low compared to the total supply it means a lot of tokens are yet to be released and this adds sell pressure.
Without enough demand this is usually bad for price.
11) Fully diluted value is not a meme (all tokens released).
Because it will eventually reach those levels.
Lets look at a more practical example.
10 of us own "the only limited edition golden Pikachu card".
Because it's very scarce the floor price is 1000$.
Because it will eventually reach those levels.
Lets look at a more practical example.
10 of us own "the only limited edition golden Pikachu card".
Because it's very scarce the floor price is 1000$.
12) What would happen if another 90 "limited edition cards" enter the market?
Instead of 10 there are now 100 of those.
Still think the floor will be 1000$?
Scarcity IMPACTS price a lot.
You might want to think twice buying tokens with an extreme low circulating supply (%).
Instead of 10 there are now 100 of those.
Still think the floor will be 1000$?
Scarcity IMPACTS price a lot.
You might want to think twice buying tokens with an extreme low circulating supply (%).
13) TOKEN DISTRIBUTION AND SALE PRICE.
When a project is launched the tokens are distributed between all parties involved.
Team, partners, investors and more.
An unfairly distribution will hurt your token price a lot. Which means your investment.
When a project is launched the tokens are distributed between all parties involved.
Team, partners, investors and more.
An unfairly distribution will hurt your token price a lot. Which means your investment.
14) See the team holding an unfair amount of all the tokens?
See VCs holding to many token supply?
Not only that BUT how much did they buy for?
VCs and partners are usually the ones buying at seed and private sale prices.
We retail buy at public sale prices.
See VCs holding to many token supply?
Not only that BUT how much did they buy for?
VCs and partners are usually the ones buying at seed and private sale prices.
We retail buy at public sale prices.
15) If seed / private token prices were sold at 0.01 and retail is getting them for 0.1 this is a major red flag.
It means at market launch (exchanges) they are already sitting at a 10x multiplier at our break even levels.
Don't you think they won't sell?
THEY WILL.
It means at market launch (exchanges) they are already sitting at a 10x multiplier at our break even levels.
Don't you think they won't sell?
THEY WILL.
16) If the vesting period shows us in the token distribution schematic VCs, partners or private investors will get their tokens every month for the next 2 years with a huge TOKEN PRICE difference this is something to worry about.
No great tech or strong team will protect price.
No great tech or strong team will protect price.
17) As an example in today's markets we'll take a look at one of the 2 hottest upcoming blockchains Sui and Aptos.
These 2 projects have both received more than 300 million dollars in funding from vcs and partners.
But they haven't released their tokenomics yet.
These 2 projects have both received more than 300 million dollars in funding from vcs and partners.
But they haven't released their tokenomics yet.
18) At what price did those VCs buy the token for?
At what price will we be buying ?
How much of the tokens are those VCs holding (%)?
How long are their locked up and when will they release and how much each month or quarter?
At what price will we be buying ?
How much of the tokens are those VCs holding (%)?
How long are their locked up and when will they release and how much each month or quarter?
19) Those 2 blockchains have both been PRAISED for their tech and innovation.
Their team is as strong as they come.
But bad tokenomics will TOTALLY break them.
The fundamentals behind them won't be able to protect price and see VCs dumping on us.
Their team is as strong as they come.
But bad tokenomics will TOTALLY break them.
The fundamentals behind them won't be able to protect price and see VCs dumping on us.
20) The tokenomics can almost always be found by visiting the whitepaper or on the official website.
Can't find them? Visit their socials and ask there.
Can't find them? Visit their socials and ask there.
20) Projects with well-designed tokenomics are much more likely to succeed since they have done an excellent job of rewarding the purchase and holding of the token.
Projects with bad tokenomics are bound to fail because users sell the tokens at the first hint of danger.
Projects with bad tokenomics are bound to fail because users sell the tokens at the first hint of danger.
21) If you want to keep up to date to most of my content and interesting projects give me a follow @CryptoGirlNova.
I also research the communities top voted cryptocurrency every sunday so you can keep track of all the most exciting projects.
Your favorite writer Nova ❤️
I also research the communities top voted cryptocurrency every sunday so you can keep track of all the most exciting projects.
Your favorite writer Nova ❤️
22) If you had value from this and liked this thread, it would really bring a smile to my face if you could retweet the first post so this can help as many people as possible.
Everyone deserves free knowledge 📘
Love you all ❤️
First post 👇
Everyone deserves free knowledge 📘
Love you all ❤️
First post 👇
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