What are tokenomics?

When a problem is solved value is created. Tokenomics look at how that value is distributed/shared/moved between different users involved. Essentially tokenomics are a set of rules or conditions that determine how value flows within a protocol. If you’re interested in getting a better understanding of tokenomics you can check out our Intro to Tokenomics course.

What is Tokenomics Hub?

Tokenomics Hub is a library and platform of community-sourced tokenomics reports of leading crypto and web3 protocols. These reports give users a quick and easy way to get a clear understanding of what a protocol’s tokenomics mean.

How to evaluate tokenomics?

There are 5 major things to consider when evaluating tokenomics; the token utility or how the token is used in the protocol, demand drivers or where demand for the token will come, value capture or how the token will capture the value created by the protocol, business model or how value is being shared between different users and the protocol and finally token distribution and allocations along with their respective vesting schedules.

Tokenomics Hub reports are based on these 5 aspects to provide an easy-to-understand and to-the-point analysis of a protocol’s tokenomics

What is token utility?

Token utility can be thought of as the token use case or how the token is used in the protocol. Examples include token used for governance, pay for gas, as staking requirement for a node operation in proof of stake, membership access and more.

How do you design tokenomics for your cryptocurrency?

To begin, you have to assess the viability of a token's for your project. Then, analyze the target market and user base, which includes investors. Next, align the user base with the protocol's long-term sustainability through incentive structures (aka tokens).

Though the process may seem complex due to the numerous variables and steps, the Tokenomics Design Space simplifies it by offering an easily comprehensible framework for designing tokenomics.

What is token utility?

A crucial aspect of designing good tokenomics lies in comprehending the motivations and actions of your user base when engaging with your protocol. The objective is to establish a mutually beneficial relationship between users and the protocol. By gaining insight into their underlying motivations and intended tasks, you can develop incentive structures that promote desirable behaviours and discourage unfavourable ones, all in the best interest of the protocol. This encompasses various elements, including allocations for investors, vesting schedules, and incentive frameworks, among others.

The Tokenomics Design Space was meticulously developed by leveraging the experience of Tokenomics DAO in designing tokenomics, providing a a user-friendly approach to creating robust tokenomics solutions.