Introduction:

Welcome to a new series where I will be sharing the tools and methodologies I use to find value across the cryptosphere. We are going to take a bottom up approach, zooming in on different aspects of the cryptocurrency market. We want to know the specific details while retaining a holistic and multi-faceted approach. Lets dive in!

Tokenomics:

Supply/demand is everything in a novel, and relatively illiquid market such as cryptocurrency. When one is performing their due diligence, they must properly assess tokenomics to understand the supply side of the equation.

Here are some key questions to ask yourself prior to investing..

• What is the token's circulating supply?

• How does this compare to the total supply?

• Who owns majority of the tokens?

• How are the new coins minted and distributed?

• Is the project inflative or deflative in nature?

This is of course from the fundamental "investing" perspective. Traders typically have shorter time horizons where these questions are not as quintessential. The next logical question, where does one access the information required to answer these questions?

• CoinGecko

  • Can answer most of these questions, and is a great free resource. Here is an example of their expertise regarding the ETH Supply Schedule

Vesting Schedules:

Venture capital makes the world (and crypto) go around. Although VC influence often brings much needed attention to projects, it is usually correlated with an opportunity to sell their bags. Early tranches are given ridiculously low prices.

Follow the money, right? Coinmarketcap.com has a great feature where you can track the portfolios of the biggest venture capitalists in the space:

To avoid being "dumped on" by VCs, you must understand when they can sell.  Typically one can find this information included in the whitepaper. Here is an example with Aptos (APT)

Final Note: If you do not know where the yield comes from, you are the yield.