What is #emission?

Emission is when new tokens are minted in a digital economy in the form of cryptocurrencies, adding to the supply.

#tokenomics #tutorial #web3 Image
In most digital economies, token emissions happen on a predetermined basis over a set period of time.
For example, @dYdX’s potential 2% annual inflation starting 5 years after launch.

Token holders can continuously decide whether to add this 2% inflation or not but it is capped at max. 2%.

Check out our 101 article about dYdX: tokenomicsdao.xyz/blog/tokenomic… Image
This was a quick breakdown of the #tokenomics term --> emission.

Make better decisions in #web3 --> learn tokenomics! Image

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More from @tokenomicsdao

Nov 23
Some L1 protocols, such as #Bitcoin, rely on Proof-of-work (PoW) mining for network operation and security.

The creator of a PoW token can set a pre-mine. This means they can create a number of tokens immediately before PoW mining starts.

#tutorial #tokenomics #powmining Image
Back in the day, this was a standard procedure to ensure the creators could cash in at a later time when their token gained some traction. Image
If a pre-mine is too large compared to the total supply of the token, this was a strong indicator not to invest in the project.

The creators could dump large amounts of tokens on the market and the price would tank. Image
Read 5 tweets
Nov 18
Two questions:

(1) How does a protocol fairly launch a token with little liquidity and prevent frontrunning/bots?

(2) How does a protocol fairly buyback its token, also prevent frontrunning/bots?

Let's try and answer these questions

A 🧵 by @MasonFasco

1/13
The Liquidity Bootstrapping Pool (or LBP) was developed by @Balancer to help solve DEX token launch problems such as bots & frontrunning, centralisation of tokens and low seed liquidity to name a few

2/13

docs.balancer.fi/products/balan…
To understand the LBP a little better we have to to understand what *weighted* pools are

Uniswap V2 pools have a fixed 50/50 weighting, what this means is that the pool assume that 50% of the value of the entire pool is in one of the two assets

3/13
Read 15 tweets
Nov 16
Fully diluted market cap (FDMC) is the maximum supply of tokens multiplied by the token price.

It asks the question: What if all tokens were in circulation? Image
If a #fullydilutedmarketcap is much higher than the market cap, it means there are a lot of tokens locked up waiting to come on the market. Image
Example:
If the market cap is only 10% of the FDMC and assuming the tokens are all released in the next year, the project has to demonstrate 10x growth (1000% !) in a year just to MAINTAIN its current price. Image
Read 6 tweets
Nov 14
Total Market Capitalization (or market cap) is an easy way to determine the overall value of a crypto-economy or DAO. Image
Market cap is a concept borrowed from TradFi. It refers to how much a company is worth as determined by the stock market.

It is defined as the total market value of all outstanding shares.
To calculate market cap you multiply the number of outstanding shares by the current share price.

ie. 1M shares x $100 per share = $100M market cap
Read 7 tweets
Nov 11
People get this one wrong a lot because it is confusing as hell.

Does a token burn affect circulating supply or not?

What is circulating supply vs. total supply?

And what are the most common uses when evaluating tokenomics?

(This is post 3 in our BIM series)
#Circulatingsupply measures the quantity of a token ALREADY in circulation, meaning tokens available in the open market.

These tokens are in wallets where they can be sold instantly without or only very short lockups.
A token burn is never done from these wallets (have you ever sent tokens to a 0-wallet on purpose?).

Note: Treasury tokens are NOT part of circulating supply!

Why? Because a treasury is governed and cannot dump on the market (unless it's a straight-up scam project).
Read 10 tweets
Nov 9
Here is a basic but effective #tokenomics concept you can use to spot scammers:

--> Supply and vesting schedule
(Token distribution, Supply distribution, Token allocation - all mean the same thing)

This is post 2 of our #basicinvestormetrics (BIM) series. Image
These are the concepts you need to know:

- Supply distribution
- Vesting schedule
- Token emission schedule
Supply distribution:

Who received how many tokens when the project launched?
What are the tokens intended uses per category?

This usually looks like a pie chart. From there you can dive into the purpose of each category. Image
Read 13 tweets

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