Quick coin analysis before buying
BTCUSDTHow to evaluate the tokenomics of the project?
Below you will find the main questions that you need to ask yourself when analyzing the tokenomics of the project - this scheme will not predict the price of the token with an accuracy of a cent, but it will help to predict the dynamics and assess the prospects.
1. Supply
Main question: based on supply alone, will the token be able to maintain/increase the price, or will it be eroded by inflation?
General supply
— How many tokens exist today?
How many will there be in the future? Is there a supply limit?
Emission rates
Is the emission rate fixed or changing?
— If it changes, what factors determine it?
Allocations/vesting
— How was supply originally distributed among investors, community, team? Are there any groups that own a significant share of the supply and could exert significant selling pressure after vesting ends?
— What is the vesting schedule for the largest holders?
2. Demand
Main question: why would anyone hold this token?
ROI
- Without taking into account the price increase, what income does a simple hold of a token bring (for example, due to staking)?
— Is it possible to get additional profit through farming?
— Are protocol revenues distributed among token holders?
— Is there a rebase* as inflation progresses?
* A rebase is similar to a stock split, when holding or staking a token allows the owner to increase its amount, thereby compensating for the impact of inflation (for example, a mechanism when the share of ownership of a supply remains unchanged).
Community
How active are Discord and Twitter of the project?
— Is there an ecosystem fund? Grants? Hackathons?
— How actively is the protocol working on community involvement?
— Are there one-time or ongoing initiatives to create additional demand for the token?
— Is there a token blocking program? If yes, how many awards are allocated to it and what are the requirements for receiving these awards?
— What share of the total number of tokens in circulation is locked?
— What additional selling pressure will arise after the expiration of locks?
Are there non-monetary benefits from staking and locking tokens (e.g. increased voting power)?
It is worth noting that even taking into account all these factors does not in itself guarantee the growth of the token or the success of the project, but is only one of the necessary aspects, in addition to the market phase, hype around a particular direction, and others.
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