Thread by @bytes032

The best book I've read this year:

Economics and Math of Token Engineering and DeFi

It has more insights on tokenomics/DeFi than any book I've ever read.

Here are 70 questions that will change the way you think about tokenomics forever: 🧵

General

1. What tokens are utilized by the project?

2. If multiple tokens exist, what's the reason?

3. What's the market capitalization of the token?

4. How many tokens are currently in circulation?

5. What's the maximum potential supply? (we will delve into this in the Supply section)

6. What is the Fully-Diluted Valuation (FDV)?

7. Is the token supply inflationary, constant, or deflationary?

8. Where can the token be purchased?

9. Why is the token available on these specific DEXes / CEXes?

10. How robust is the liquidity of these exchanges for the token?

11. What's the trading volume of the token on these exchanges?

12. Who are the key liquidity providers or market makers?

13. Are their incentives long-term or are they propelled by unsustainable token emissions?

14. Who are the parties you trust when holding the token (e.g., chain, bridge, team, etc.)?

15. Does the team benefit if the token's value increases?

16. Do users (excluding tokenholders) benefit from an increase in the token's value?

17. Can the project operate without a token?

Token Launch

18. Why was this particular blockchain chosen for the token launch?

19. Was the chosen chain prioritized for its security, speed, or interoperability?

20. What was the project's age at the time of the token launch?

21. What method was used to launch the token

22. How much capital did the project raise through its token launch?

23. At what FDV was the launch conducted?

24. How has the Market Cap/FDV shifted since the launch?

25. How does the chosen initial supply percentage impact future emissions and dilution for token holders?

Supply

26. What factors influence the selling pressure of the token?

27. How much is the token supply anticipated to increase in the future?

28. Who are the token holders?

29. What percentage of the supply is controlled by the top 10 addresses?

30. What about the top 100 addresses?

31. When will VC and team members gain access to their tokens?

32. Have a significant number of tokens been lost or burnt?

33. How much of the token is held by the community?

34. Is the token distribution equitable?

35. What is the schedule for token emissions?

36. To whom are emissions allocated?

37. What's the common behavior - do they sell immediately or hold on to the tokens?

38. Can you profit from emissions via staking or liquidity provision?

39. Do emissions contribute to your profit or merely shield against dilution?

40. Why aren't some of the released tokens in circulation?

41. What will occur when locked (or staked) tokens are released?

42. Are there mechanisms for community lockup to release tokens in bulk

Demand

43. What's the main reason for people purchasing this token?

44. Can users easily shift to other similar projects?

45. Are there any protocol revenues distributed to the token holders?

46. How did you discover this project?

47. What's the expected return from holding this token?

48. Is there an active community on Twitter?

49. Will there be a demand for this token in the future?

50. Does the project have a dedicated, almost cult-like following?

51. Has the project or community been active for a long time?

52. Does the project buyback or burn its tokens?

53. Will they be as active in a month or a year from now?

54. Do tokens get destroyed or transferred when used to purchase a product or service from the protocol?

55. Is there an incentive to hold the token that's driven by game theory?

56. Does the project have the smell of a Ponzi scheme?

57. Is there a mechanism in place to lock up tokens?

58. Does the project have a token burning mechanism?

Token Utility

59. Are you expected to hold it or use it for transactions/services?

60. Can the token be used for governance?

61. Is the token used to secure the project?

62. Can you use the token as collateral to borrow liquidity?

63. What's the token's purpose?

64. Do you plan to sell immediately or hold on to the earnings?

65. How concentrated are governance votes if the token is used for governance?

66. What percentage of the project's cash flows are shared with token holders?

67. What are the minimum token requirements to propose and escalate a governance proposal?

68. Can governance decisions influence or enable profit distribution?

69. Can you earn from governance voting incentives (bribes)?

70. Will your vote make any significant difference?

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