In #tokenomics, demand refers to consumers' desire for a particular cryptocurrency.

If the demand increases faster than the supply, the price of the #cryptocurrency will increase.

How does demand increase?

#demand #valuecreation #web3 Image
What can increase the demand for a token?

1. Increase in Awareness: When there is an increase in awareness of the project, the demand can increase.

2. Increase in Utility: When there is an increase in utility in the project, the demand can increase. Image
Keep in mind: The core demand driver for a token is always the value creation of the project.

If this is not the case, the token price will flame out faster than you'd expect. Image
Tokens have MANY benefits for founders and investors. But please remember, the token itself is NEVER the driver of value.

A token acts as a MULTIPLIER of the value that the products or services create. That means, if value creation is near 0, the token cannot multiply anything. Image
Modeling demand for tokens is the hardest part of tokenomics.

There are very few models, and so far, none have accurately predicted the future.

We have created our own tokenomics calculation template to model different demand drivers. Image
The tokenomics calculation template is included in our "Intro to Tokenomics" course.

This course is the FASTEST way to learn the basics of tokenomics.… Image

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More from @tokenomicsdao

Dec 2
How do you distribute rewards in a decentralised community?

We pay contributors for articles, threads, podcasts etc.

Every month we set a budget and vote which content piece gets how much of it.

We built ourselves a little tool!

How do you all deal with this? 🤔🧵
It's really quite simple. We have a content calendar in Notion that keeps track of everything we publish. Image
Reward rounds are held monthly, e.g. we import all content published in October into the tool.

Every contributor can vote, receiving 10 voting points per content piece e.g. if we published 15 pieces, that's 150 points to distribute.
Read 5 tweets
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
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.
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.
Read 5 tweets
Nov 21
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:… Image
Read 4 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

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

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

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
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

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