#28 - Intro to Tokenomics (Part 2)

One of our most downloaded podcast episodes is “Intro to Tokenomics”. Because of that, we decided to provide more opportunities for our community to get educated on Tokenomics. So, we recorded a total of five live sessions in the last 2 months, explaining Tokenomics from first principles. The recordings of these sessions are now edited and available as a self-service online course that anyone can consume on demand.

In this episode, we cover 20 questions that were asked during the education sessions, discussing them in detail, and providing several online resources that will help you during your own project research. Enjoy!

Resources:

• Intro to Tokenomics Podcast

• Basics of Tokenomics Course

• Education Chat Discord Channel

Show notes:

Basics

1. Difference of Tokenomics of DAOs and Tokens/Coins

2. How are tokens different from a shares or equity? Can a token have similar equity properties as a share?

   Tokenomics DAO @tokenomicsdao

   How do traditional and crypto businesses compare and what impact does this have on tokens? Let's look at: --> Supply --> Utility --> Fundamentals --> Evaluating Stocks --> Evaluating Tokens --> Governance 🧵👇

   

3. Can a share have the same utilities as a token? Could that be added?

4. Why is it important to do tokenomics correctly? There are many articles detailing how bad tokenomics lead to poor outcomes.

5. How does an increase in supply affect the price? (IPO compared to token launch, how is the share price found early on)

Protocols specific

1. Is Ethereum 2.0 inflationary or deflationary?

   1. https://ultrasound.money

2. What type of effect on price do you expect with Eth 2.0 change?

   #1 - Tokenomics of Ethereum

3. In case of Uniswap, how does the treasury ever increase? Since all there’s in it is UNI (https://tokenomicsdao.xyz/blog/tokenomics-101/tokenomics-101-uniswap-uni/)

Valuation

1. What are good metrics to value early projects?

2. How are projects making more money every year? Where does the money come from that pushes the token prices up?

Vesting Allocation

1. Vesting periods: what happens when the un-locking time is near? https://www.coingecko.com/en/coins/chainlink/tokenomics

2. How does the allocation to the community affect the price because the majority of protocols allocate a lot to the community? Is it good or bad?

   Incentives structures

3. What happens when a seed investor sells locked tokens to another investor, how would this affect the price of the token?

4. Instead of vesting tokens, why don't projects lock them in an immutable treasury and only pay out staking rewards?

Mechanism

1. Can you give an example of why buying a token and then burning it is a powerful mechanism? (https://www.placeholder.vc/blog/2020/9/17/stop-burning-tokens-buyback-and-make-instead)

2. Because regulatory clarity of token burning is missing, do you feel like there could be another solution that you could send a token to until there is a green light from regulators?

3. How does staking for governance rights work? Who benefits?

4. How can we predict that burning this amount of tokens at a specific market cap would result in this effect on price? https://ultrasound.money

5. What is the alternative way for the protocol to provide rewards after the tokens all get vested?

6. How do you create a token with a mix of projects so that we can be insulated from an event such as the blow-up of Terra/Luna?

Watch this episode on YouTube:

Disclaimer:

Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.

None of this is legal advice. This podcast is strictly educational. Talk to your lawyer.

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