Token Creation

Tokenomics

Tokenomics is the topic of understanding the supply and demand characteristics of cryptocurrencies.

“Tokenomics is a term that refers to the study and analysis of the economic aspects of a cryptocurrency or blockchain project, with a particular focus on the design and distribution of its native digital tokens. The term is a portmanteau of words token and economics.”

– Wikipedia

To make a successful token, it is necessary to know the principles of Tokonomics, check different examples and then act according to the instructions.

HowTo Create Token

Business Transparency

Know Your Business (KYB)

Market Analysis
Provide an analysis of the target market, including market size, demographics, and competition.

Products and Services
Determine features and benefits of products and services.

Marketing and Sales Strategy
Write down selling & Promotion plan – pricing, advertising, and distribution channels.

Operations Plan
Write down business’s day-to-day operations, including production processes, management structure, and staffing needs.

Financial Plan
Forecast projected income statements, balance sheets, and cash flow statements.

Token Purpose

Determine Token Objectives

Fundraising
Tokens are a good approach to raise funds quickly. Just beware of not become security and pass the Howey Test, otherwise get interest of investors would be difficult.

Governance
You may want decentralize your decisions, decentralization is the key to web3.

Utility
Token can provide utility to the ecosystem; like Coordination, Gas, Access, payment, etc.

Build Token Model

Define a strong ecosystem

1. Token Goals
List all the stakeholders in the ecosystem. Include their incentives, purpose and goals.

2. Token Interactions
Chart out the relationship and interactions between different stakeholders.

3. Ecosystem
Make sure that your token serves its purpose and relates properly to the different entities in your ecosystem.

4. Token workflow
Sketch the inputs and outputs to ecosystem. Where do tokens come from, how are they used and where do they sink?

5. Regulatory Concern
Make sure you’re not breaking any laws and that your token isn’t in fact a security.

Tuning Dynamic

Tune dynamic Supply & Demand

1. Derive token demands
Measure token utility, ROI, memes, behavioral patterns and governance.

2. Supply
Define total token supply and inflation, distribution to insiders and the public and how staking plays into it.

Tokenomics Supply

Define reliable supply

Total token supply
1. How many of these tokens exist right now?
2. How many will ever exist?
3. How quickly are new ones being released?

Public initial distribution
Determine public distribution method. Airdrop, ICO (IDO or IEO)
issuance rate

Insider distribution and vesting
Foundation, Team, Investors

Staking & token lock ups
goal: distributing tokens to many stakeholders & convince them involved in the project

Tokenomics Demand

Define continuously demand

Token Utility
understanding the demand curve. Calculate GDP of your economy. A high GDP drives a higher token price.

Memes
Be memorable and spreadable.

ROI
Have acceptable ROI.

Governance
Check out the decentralized governance structure offering

Liquidity

Solve Liquidity Problems in DEX

1. Price Slippage
Solution: Provide lots of liquidity (100x, 1000x of each trade) – each trade in 10% of LP change price by 9%

2. Price Arbitrage
Solution: Provide lots of liquidity more than anyone can manipulate market easily.

3. Impermanent Loss
Solution: Incentive LP providers by additional token reward or something new.

4. Opportunity Cost
Solution: additional rewards to LP providers.

Launch Time

Find a best time to launch the Token

1. Fundraising purpose
Soon after clarifying purposes, Security Test, increasing value of the plan.

2. Governance Token
After identify stakeholders, aspects of governed, beneficial reason for distributed governance

3. Product Utility
Ready necessary sources, evaluation of user base, before or after get targeted users

Prelaunch checkmark:
– Modeled your economy
Determine desired number of users, token distribution, token utility.

– Resources
Model a token, smart contracts, legal aspect of global launch, token distribution & emission. Manage liquidity on CEX & DEX.

– Market Condition
Bull market is good for fundraising, Bear market is good for highly aligned users.

Setup LP

Setup Liquidity Pool (LP) appropriately

1. Choose environment
blockchain ecosystem and AMM protocol

2. Set a price
Key points: a. Comparable companies in the market b. Earnings per share (P/E)

3. Assessing the amount of liquidity

4. Incentivizing LPs