When to activate
- Designing a new token's economic model
- Planning vesting schedules for team and investors
- Designing emission/deflation mechanisms
- Modeling staking rewards and yield distribution
- Evaluating existing tokenomics for investment decisions
When NOT to use
- For simple ERC-20 token deployment without economic design
- For centralized points/rewards systems
- For regulatory compliance analysis
Instructions
- Define token utility. Governance, access, staking, payment, or multi-purpose. Each utility affects demand.
- Design supply model. Fixed supply (deflationary), inflationary (ongoing emissions), or hybrid (halving).
- Plan distribution. Team (vested 3-4 years, 1-year cliff), investors (lock + linear vest), community (airdrop, rewards).
- Design incentives. Staking APY, liquidity mining, protocol revenue share, buyback-and-burn.
- Model value accrual. How does protocol success → token value? Fee switches, burn mechanisms, staking locks.
- Simulate scenarios. Model bull/bear markets. What happens at 10x and 0.1x adoption? Stress test emissions.
- Document tokenomics. Whitepaper section with charts: supply schedule, vesting timeline, emission curve.
Example
Token: $PROTOCOL
Total Supply: 1,000,000,000
Type: Fixed supply with protocol buyback
Distribution:
Community Rewards: 40% (400M) — linear emission over 4 years
Team: 20% (200M) — 1yr cliff, 4yr vesting
Investors: 15% (150M) — 6mo lock, 2yr vesting
Treasury: 15% (150M) — DAO governance controlled
Liquidity: 10% (100M) — initial DEX liquidity
Value Accrual:
- 10% of protocol fees → buyback and burn
- Stakers earn 50% of protocol fees (ETH)
- Target staking APY: 8-15% based on participation rate
Emission Curve:
Year 1: 100M tokens released
Year 2: 80M tokens released
Year 3: 60M tokens released
Year 4: 40M tokens released (end of emissions)
1---2name: token-economics3description: Design token economics — supply models, vesting schedules, emission curves, and incentive alignment4---56## When to activate78- Designing a new token's economic model9- Planning vesting schedules for team and investors10- Designing emission/deflation mechanisms11- Modeling staking rewards and yield distribution12- Evaluating existing tokenomics for investment decisions1314## When NOT to use1516- For simple ERC-20 token deployment without economic design17- For centralized points/rewards systems18- For regulatory compliance analysis1920## Instructions21221. **Define token utility.** Governance, access, staking, payment, or multi-purpose. Each utility affects demand.232. **Design supply model.** Fixed supply (deflationary), inflationary (ongoing emissions), or hybrid (halving).243. **Plan distribution.** Team (vested 3-4 years, 1-year cliff), investors (lock + linear vest), community (airdrop, rewards).254. **Design incentives.** Staking APY, liquidity mining, protocol revenue share, buyback-and-burn.265. **Model value accrual.** How does protocol success → token value? Fee switches, burn mechanisms, staking locks.276. **Simulate scenarios.** Model bull/bear markets. What happens at 10x and 0.1x adoption? Stress test emissions.287. **Document tokenomics.** Whitepaper section with charts: supply schedule, vesting timeline, emission curve.2930## Example3132```33Token: $PROTOCOL34Total Supply: 1,000,000,00035Type: Fixed supply with protocol buyback3637Distribution:38 Community Rewards: 40% (400M) — linear emission over 4 years39 Team: 20% (200M) — 1yr cliff, 4yr vesting40 Investors: 15% (150M) — 6mo lock, 2yr vesting41 Treasury: 15% (150M) — DAO governance controlled42 Liquidity: 10% (100M) — initial DEX liquidity4344Value Accrual:45 - 10% of protocol fees → buyback and burn46 - Stakers earn 50% of protocol fees (ETH)47 - Target staking APY: 8-15% based on participation rate4849Emission Curve:50 Year 1: 100M tokens released51 Year 2: 80M tokens released 52 Year 3: 60M tokens released53 Year 4: 40M tokens released (end of emissions)54```
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