Why Are My Coins Constantly Dumping?" That's Cause You Didn't Analyze The Tokenomics
But still, 99% of people choose to ignore it.
This simple guide will teach you to read tokenomics like a pro đ§”
Tokenomics is more than just token distribution. It includes the whole economic model of the project.
There are 5 main parts to analyze in every tokenomics:
1. Allocation and Distribution 2. Supply 3. Token Model 4. Token Incentives 5. Consensus Mechanism 1/⣠Allocation and distribution
It contains information about who will receive the tokens and how they will reach the market.
The $UNI tokenomics is considered an exemplary one, most of the tokens went to the community and the entire supply has been distributed over 4 years.
⣠Most projects distribute tokens either through a fair launch or pre-mine.
Fair launch: tokens are mined and governed by the community.
Pre-mine: tokens are created and distributed before public launch to raise capital. Most of the crypto projects come with pre-mined tokens. 2/⣠Token supply
It refers to the total number of tokens in a project and its future changes.
- Circulating supply refers to the number of tokens that are currently in circulation.
- Total supply refers to the total quantity of existing tokens either in circulation or stuck at different smart contracts and released later
- Maximum supply refers to the total quantity of tokens in a project that will exist once the maximum supply has been reached.
⣠A huge difference between market cap and total supply results in an issue called "low float high FDV" - a common one lately.
The idea is simple - a high valuation from the start will hurt the project's development because of constant selling pressure from unlocks.
3/⣠Token Model
This part refers to one main question - Is the coin inflationary or deflationary?
Let's analyze every part:
⣠The inflationary model
An inflationary model has no maximum supply limit and continues indefinitely.
Pro: Encourages network participation and growth.
Con: Leads to inflation and devaluation, diluting the existing token value.
⣠Deflationary model
This model caps token supply and may periodically burn tokens.
Pros: It creates natural demand and avoids inflation.
Cons: It may encourage hoarding, hinder new investors, and reduce token value.
An example of this is @injective $INJ.
4/⣠Token Incentives
Users should have the motivation not only to join the project but to buy a few tokens early, stay there, and continue to invest their money and time in it.
Allow token holders to benefit from holding their tokens by distributing rewards. These can be airdrops, fee reflections, or other discretional token distribution events.
⣠Staking
Token holders can stake their tokens to earn rewards by acting as validators in the network. Various use cases for the staking mechanism include:
- Holding tokens - Activity levels - Platform features - Participant status
5/⣠Consensus Mechanism
A Consensus mechanism or protocol allows distributed systems to work together and stay secure. These mechanisms conceal a great deal of the logic utilized behind a blockchain.
There are 2 main consensus mechanisms: - Proof-of-Work - Proof-of-Stake ⣠Proof-of-Work
In this protocol, blockchain miners race to solve math puzzles and create new blocks. The fastest miner earns a new token.
The block is then shared for transactions or smart contracts. This process uses a lot of energy and miners hold the decision power.
⣠Proof-of-Stake
In PoS, network integrity is upheld by nodes holding tokens, making it more cost-effective than PoW.
It encourages long-term token holding to gain more power.
That's it for today folks, Thanks for reading! For more insightful crypto content, Follow Me @Crypto PM Stay updated with the latest trends and analyses in the crypto world!
Tron, Tether and TRM Labs Start Financial Crime Fighting Force!
A 2023 report from TRM Labs showed that the #Tron blockchain was home to nearly 45% of all illicit crypto volume. Now, the blockchain founded by Justin Sun is working with TRM Labs and USDT issuer Tether in a task force created to fight financial crime.
âTRON originated with the belief that technology can be used for good and to empower people across the globe,â Sun said in a release. âBy collaborating with #TRM Labs and Tether, TRON is helping to ensure that blockchain technology is used to make our world a better place, and sends a clear message that illicit activity is not welcome in our industry.â
$ETH $SOL $BTC
The task force, the T3 Financial Crime Unit (T3 FCU), will combat illicit activity involving $USDT , the largest stablecoin, on Tron. Data from Tether shows thereâs $60.7 billion of USDT issued on Tron, $53.9 billion on the #Ethereum blockchain and $712 million on #Solana .
The speech is expected to shed light on the FED's game plan regarding the upcoming interest rate cuts, with the event titled "Reassessing the Effectiveness and Transmission of Monetary Policy".
The key will be any hints that could indicate by how much they'll cut rates in September: 25bps or 50bps?
Liquidity Lab Most Important News & Narratives For Today!
Today's Events:
- US PPI Data (Exp. 0.2% MoM) - $ARKM Istanbul Blockchain Week - $IMX Closing of ImmutableX - $ETH ETHWomen (13-14 August) - $NTRN Liquidity Vote - $ATLAS Star Atlas Tensor - $SWEAT Unlock of $3.31M
News and Narratives:
- $LUNC 3AC sued Terraform Labs for $1.3 billion - $ETH Grayscale recorded the first 0 outflows day - $BTC Marathon Digital announced a $250M offering to buy Bitcoin - $XMR Binance will start converting $XMR to USDC on September 2 - $LDO Set to bring stETH to $BNB chain - $EIGEN Competitor Symbiotic launched devnet, plans mainnet in Q3 - $OP Announced plans for an interoperability system for L2 chains - $MKR - $COMP DEF bought patent to prevent lawsuits against the 2 protocols - $ETH ICO whale deposited $154M to OKX in the past month, still holds $41M - $SOL $PYUSD supply on Solana surpassed its supply on $ETH - $BTC Metaplanet bought an additional $3.3M in Bitcoin
General News:
- Singapore Biggest bank DBS rolled out treasury tokens pilot - Argo Bitcoin miner repaid $35M Galaxy bailout loan - Germany State-owned bank set to issue tokenized bonds - Pumpfun Exploiter pleaded guilty in London, faces 7 years in prison
Scammers are now taking advantage of fake tokens through #AI , #RWA , #DePIN and #memecoin rebrands. Here are 4 schemes scammers use and how you can avoid them.
1. Initial Coin Offerings (ICOs) and Token Sales: Attackers may launch fake ICOs or token sales, enticing investors with the promise of getting in early on a groundbreaking project. Once they collect funds, they disappear, leaving investors with worthless tokens.
2. Airdrops and Giveaways: Fake tokens are sometimes distributed through airdrops or giveaways, where users are asked to provide personal information or pay a small fee to receive the tokens. This can lead to further scams or identity theft.
3. Pump and Dump Schemes: Scammers may artificially inflate the price of a fake token through coordinated buying (pump) and then sell off their holdings at the peak (dump), leaving other investors with devalued assets on their hands.
4. Launchpool Token Scams: Fraudsters exploit hype around legitimate exchange promotions, offering "discounted" tokens through unofficial channels. These fake tokens capitalize on real launches but aren't associated with reputable platforms. $QKC $TON $SUI
- $MOTHER Bybit will list perps on August 9 - $GMX Launched $SHIB perps market on Arbitrium - $ETH Nomad bridge hacker transferred $35M to Tornado Cash - $BTC Michael Saylor said he personally owns +$1B in Bitcoin - $SUI - $TAO Grayscale launched new investment trusts - $BTC Morgan Stanley advisers can officially pitch ETFs - $XRP Ripple-SEC case ended with $125M fine - $HOOD Reported Q2 revenues up 161% with rising crypto volume - $BLAST Memecoin Pacmoon announced migration to $SOL - $BTC Metaplanet secured $6.8M loan to purchase Bitcoin - $SOL Brazil approved first $SOL ETF - $NXRA Burned 32.5M stolen tokens - $IOTA Perps will be delisted from HTX on August 15 - $SHFL Announced round 2 of airdrops
General News:
- FTX Court approved $12.7B settlement with CFTC - Kamala Tied with Trump at 49% odds on Polymarket - Trump Sons rumored to launch tokenized real-estate project
The #SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand. We respect the Courtâs decision and have clarity to continue growing our company.
This is a victory for Ripple, the industry and the rule of law. The SECâs headwinds against the whole of the #XRP community are gone. $XRP
- US S&P Global Services PMI - US ISM Services PMI (Exp. 51) - Taipei DeFi Summit ($OM CEO Speaking) - $GMX Buyback Proposal Vote - $STRK Starkware Summit - $VR Magic Madness - $MODE Unlock of $3.5M
News and Narratives:
- $VIX Volatility Index surged to levels not seen since 2020 - $HOOD Halted 24 trading feature amid volatility - $COIN Coinbase reportedly considering Crypto Index fund launch - $ZETA Polygon users can now access Universal Apps on ZetaChain - $BTC Trump floated paying off $35T national debt with Bitcoin last week - $WLD OpenAI is both a strategic partner and competition - Microsoft SEC filing - $ETH Jump Crypto continues to deposit Ethereum to CEXs - $FTN Integrated with Xcoins payments - $NEIRO Vitalik sold the 17B tokens sent to him - $TRX Justin Sun denied rumors of his positions being liquidated - $JUP Proposal to reduce supply passed with 95% in favor
General News:
- Japan Stock market had it's second worst day ever - Turkey Stock exchange halted trading after open - US Odds of a FED emergency cut hit 33% on polymarket
#Unemployment Rate at 4.3% instead of 4.1% and the market is panicking!
âą VIX (Volatility Index) is up 45% in just one day... currently at 27! âą $2.9 TRILLION wiped out from stocks today. THE WORST DAY SINCE 2020 COVID CRASH. âą JP Morgan sees (2) 50bsp rate cuts in September and November. âą Goldman Sachs sees (3) 25bsp rate cuts in September, November and December.
Also the Sahm Rule has been triggered - it has predicted every recession since 1970s correctly with only 2 false positives that ended up being correct with a delay of a few months.
Claudia Sahm just spoke and said that "we're not in a recession but the odds of entering a recession in the next 3 months are high."
This would also allign with the fact that we always get a recession after the first interes rate cut, which will happen in September. We also had the usual stock rally after a rate pause.
Sure, itâs possible that this time could be different and that's what the FED will be hoping for whilst cutting rates from September to reduce the impact.
#Federal Reserve says it does not expect it will be appropriate to lower rates until it has gained greater confidence #inflation is moving sustainably toward 2%
- $LTC Charlie Lee announced a $1.25M contribution to the Litecoin Foundation - $BTC #ElonMusk said he sees merit in Bitcoin during a podcast - $XDC Partnered with Deutsche Telekom MMS to drive RWA tokenization - $COTI Partnered with Lava Network to boost RPC capabilities - $ARB Pear Protocol launched new pair trading platform on Arbitrium - $MAV Launched Maverick v2 on Scroll - $SCRT Integrated their confidential computing layer with $GNO - $SOL Flipped $ETH in weekly fees for the first time ever - $AAVE Launched lido-specific market - $JTO CEO announced possible plans for new bell curve - $GALA Announced the launch of GalaChain testnet - $SAND Announced bridge to $BNB and Base blockchain - $SOL-$ADA-$MATIC SEC backed down on claiming they're securities in Binance suit
General News:
- Polymarket Hit record-high volume and active traders in July - US Vote on Sen. Stabenow's crypto regulation bill delayed to September - SEC Artists filed a complaint against SEC over whether NFTs are securities
#SEC Charges Nader Al-Naji with Fraud and Unregistered Offering of Crypto Asset Securities
Founder of the BitClout blockchain protocol now known as Decentralized Social, or DeSo, adopted the pseudonymous moniker Diamondhands to evade regulatory scrutiny
The Securities and Exchange Commission today charged Nader Al-Naji with perpetrating a multi-million-dollar fraudulent crypto asset scheme involving a social media platform called BitClout and its native token of the same name (herein, #BTCLT ).
According to the SECâs complaint, starting in November 2020, Al-Naji raised more than $257 million from unregistered offers and sales of BTCLT, while falsely telling investors that proceeds would not be used to compensate him or other BitClout employees. In reality, the complaint alleges, Al-Naji spent more than $7 million of investor funds on personal expenditures like rental payments for a Beverly Hills mansion and extravagant cash gifts to family members.
- $BTC SEC approved Grayscale Bitcoin Mini Trust for trading on NYSE - #Lummis announced bill for US Treasury to buy 1 million $BTC - State of Michigan disclosed purchase of $6.6M $BTC - $COMP $24M proposal passed by whale over DAO objections - $DOGE Owner adopted a new dog named Neiro sparking memecoin launches - $SFP SafePal integrated deBridge for cross-chain interoperability - $XRP Set to unlock 1B tokens on August 1 but could re-lock much of this - $LUNC Bybit will support LUNC's v3.1.3 network upgrade - $ETH NFTs recorded lowest monthly sales since November 2023 - $1000STARL Bybit announced the delisting of perps on August 1
General News:
- #Silvergate Federal Reserve Board dropped enforcement action - #RFK Jr Proposed 4 million $BTC as US Strategic Reserve - #Trump Pledged to fire SEC Chair Gensler "on day one" if elected and establish Strategic BTC Reserve - Slovenia Becomes first EU nation to issue sovereign digital bond settled on-chain (worth $32.5M)
 Trust (ticker IBIT) has roared to a new all-time high, capturing an impressive 67% of the spot Bitcoin ETF volume market share. This surge surpasses its previous record of 61%, further cementing BlackRock's dominance in the crypto ETF space.
- US Q2 GDP (Exp. 2%) - US Initial Jobless Claims (Exp. 238k) - $BTC Bitstamp MtGox Distribution Begins - $BTC Bitcoin 2024 Begins - $ILV Game Launch - $DAR Dar & Land Staking - $G Perps Listing Bybit - $DEXE Perps Listing Bybit
News and Narratives:
- $ETH ETFs recorded a net outflow of $133M yesterday - $BTC Kraken reportedly directing MtGox creditors who want to sell to OTC desk - $ASTR Integrated $LINK CCIP for cross-chain ecosystem - $INJ Integrated Mountain Protocol to power tokenized T-Bills - $SUI ETZ added the token to its tax-advantaged IRAs - $NGL Released a new roadmap highlighting key upcoming updates - $UMA Polymarket added credit and debit card support - $SYS CEO set to resign following allegations of mismanagement - $XDC Deutsche Telekom joined the project as an infrastructure provider - $BTC Cathie Wood sold $7.8M of its own spot ETF holdings - $FIS Set to release a burning proposal - $COIN Coinbase UK fined $4.5M by FCA
General News:
- BlockFi Will distribute $BTC and $ETH to creditors on a weekly to monthly basis - Hashdex Filed S-1 for an ETF that holds both $BTC and $ETH - India Set to release new crypto policy by September - Trump Scheduled to speak at Bitcoin 2024 on Saturday