Onchain Tokenomics for a Sustainable Ecosystem

Author

Reads 1.3K

Imaging of Tokenization
Credit: pexels.com, Imaging of Tokenization

Onchain tokenomics is a crucial aspect of building a sustainable ecosystem. By designing tokenomics that are aligned with the needs of the community, projects can create a self-sustaining system that promotes growth and development.

Token supply is a critical component of onchain tokenomics. A well-designed token supply can help prevent inflation and maintain the token's value. For example, a project that uses a fixed token supply can prevent over-issuance and maintain a stable token price.

Token distribution is also a key factor in onchain tokenomics. A fair and transparent token distribution mechanism can help ensure that the token is distributed to the right people at the right time. This can be achieved through a combination of airdrops, token sales, and community contributions.

By designing onchain tokenomics with a focus on sustainability, projects can create a thriving ecosystem that benefits all stakeholders.

Token Allocation and Distribution

Token allocation and distribution are crucial aspects of onchain tokenomics. Superseed's approach prioritizes transparency and fairness, moving beyond the traditional high-FDV, low-float model.

Credit: youtube.com, What is Tokenomics? Understanding Crypto Fundamentals (Supply, Market Cap, Utility)

The Superseed token launch features a balanced distribution plan, which includes a Super Sale with all tokens fully unlocked at launch. This allows participants to engage with the ecosystem from day one.

A significant portion of the tokens are allocated to the Foundation Treasury, initially 20% unlocked with a 2-year linear vesting schedule. This supports ongoing development and ensures a steady release of tokens over time.

The Ecosystem Fund also receives 20% of the tokens, initially unlocked with a 2-year vesting schedule. This fund is used to support ecosystem growth and development.

Private Investors receive tokens through a 1-year linear vesting schedule, ensuring strategic alignment with the project's long-term vision. Contributors, on the other hand, receive tokens with a 6-month cliff followed by a 3-year vesting period.

The community plays a significant role in Superseed's tokenomics, with 4% of the total supply allocated to community incentives. This includes Staking Rewards (1%), L3 Score Rewards (1%), and Quests and Special Events (2%).

Here's a breakdown of the community allocation:

The team's token allocation is tied to their work on the TG mini-app v2, with tokens received based on revenue generated through performance rather than pre-allocated holdings. This approach ensures that the team's incentives are aligned with the project's success.

Token Supply and Burn

Credit: youtube.com, Token burning 🔥 (Explained By Animation)

Token Supply and Burn is a crucial aspect of onchain tokenomics. Nearly 95% of team-controlled tokens are being burned across Ecosystem and Grants, Community, Reserve, and Advisors allocations.

This significant burn reduces the token's supply by 50% of the total supply.

Tokenomics and Governance

Tokenomics and Governance are closely tied together. Community members must stake tokens to participate in governance decisions.

In some cases, active participants may receive rewards, such as 1% of the DAO Treasury, to incentivize involvement and wise decision-making.

Here's a breakdown of the key metrics associated with ERC-20 tokens:

Airdrops (20%)

Airdrops are a key component of Swan's tokenomics, making up 20% of the total supply. They're designed to incentivize broad network participation and engagement.

To achieve this, airdrops distribute Swan tokens widely across the community, stimulating network activity and growth. This helps enhance user adoption and community vibrancy.

A significant portion of the airdrops is reserved for computing providers, accounting for 10% of the total supply. The remaining tokens are distributed linearly over 32 quarters.

Here's a breakdown of the airdrop schedule:

  • 2% of the tokens are unlocked at the Token Generation Event (TGE).
  • The remaining tokens are distributed linearly over 32 quarters.

The annual airdrop rate cannot exceed 10% of the current circulation supply, ensuring a steady and sustainable distribution of tokens.

Total Token Supply

Credit: youtube.com, 🤔 FAQ Series: How To Decide Total Token Supply in Tokenomics*

The total token supply is significantly impacted by the team's token burn strategy.

We're talking about a massive 50% of the total supply being burned, which is a huge reduction.

This burn is focused on team-controlled tokens across various allocations, including Ecosystem and Grants, Community, Reserve, and Advisors.

The team is burning nearly 95% of these tokens, which amounts to a substantial elimination of any future claims on these tokens.

Tokenomics

Tokenomics plays a crucial role in the success of a project, and understanding its mechanics can be a game-changer for investors and community members alike.

In the context of governance, tokenomics is all about how tokens are distributed, utilized, and valued. For instance, Superseed's token distribution plan is designed to prioritize transparency and fairness, with a balanced approach that supports sustainable growth.

A key aspect of Superseed's tokenomics is the token launch, which goes beyond the traditional high-FDV, low-float model. This means that tokens are not locked away, but rather, they are distributed in a way that empowers participants to engage with the ecosystem from day one. For example, Superseed's Super Sale is fully unlocked at launch, allowing participants to engage with the ecosystem immediately.

Credit: youtube.com, What Gives Governance Tokens Value, and Why They Are Important

The tokenomics of a project also determines how tokens are allocated to different stakeholders. For instance, Superseed allocates 4% of its total supply to community incentives, which are distributed as staking rewards, L3 score rewards, and rewards for quests and special events.

Here's a breakdown of the community allocation:

This allocation ensures that active participants are directly rewarded for their engagement with the ecosystem. Additionally, the team will only receive tokens through its work on the TG mini-app v2, based on revenue generated through performance rather than pre-allocated holdings.

In terms of token distribution, Superseed's airdrops play a significant role in incentivizing broad network participation and engagement. Airdrops distribute tokens widely across the community to stimulate network activity and growth, enhancing user adoption and community vibrancy.

The annual airdrop rate cannot exceed 10% of the current circulation supply, and 10% of the total supply has been reserved for computing providers over the years. This ensures that tokens are distributed fairly and transparently, without favoring any particular group or individual.

Overall, understanding tokenomics is essential for making informed decisions about investments and participation in a project. By examining the token distribution plan, allocation, and utilization, you can get a better sense of a project's potential for growth and success.

Competitive Intelligence

Golden and Silver Bitcoin Tokens on a Financial Market Diagram
Credit: pexels.com, Golden and Silver Bitcoin Tokens on a Financial Market Diagram

Competitive Intelligence is a crucial aspect of Tokenomics and Governance. It helps you understand how your users overlap with other collections, making it easier to identify potential partnership opportunities and user acquisition targets.

You can use this information to spot competitive threats and stay ahead in the game. For instance, you can analyze the performance of other smart contracts to see where you stand.

Deep diving into competitive performance at the wallet/user level gives you a more detailed understanding of your target audience. This can help you tailor your strategy to better resonate with your users and stay competitive in the market.

My Ecosystem

In the "My Ecosystem" section, you can dive deep into your token's ecosystem, getting real-time data on smart contracts, including royalties and tokenomics. This level of transparency is invaluable for investors and developers alike.

Tokenomics is a crucial aspect of a token's ecosystem, and understanding it is key to making informed decisions. The "My Ecosystem" section provides in-depth analysis of tokenomics, giving you a clear picture of how your token's economy works.

Credit: youtube.com, What is Tokenomics | Building a Stable and Compliant Crypto Ecosystem | Caizcoin

Real-time royalties are also available in the "My Ecosystem" section, allowing you to track how your token's royalties are being distributed. This information is essential for understanding the token's revenue streams and potential for growth.

Retention charts in the "My Ecosystem" section help you visualize how well your token is retaining its users and investors. This metric is critical for determining the token's long-term viability and potential for success.

Wallet segmentation in the "My Ecosystem" section provides a breakdown of your token's user base, giving you a better understanding of who's holding your token and how they're using it. This information is invaluable for tailoring your marketing and development strategies to your target audience.

Rewards and Incentives

Onchain holders can earn ETH rewards by staking, which are derived from fees collected across the ecosystem. These rewards are calculated based on the number of staking points, which depend on both the amount and the duration of staking.

Credit: youtube.com, What Does STAKING Even Mean? Types of Crypto Staking EXPLAINED

Each staking season runs on a one-month basis, with rewards issued at the season's end. This means that stakers can expect a new reward period every month.

For the first two staking seasons, $onchain tokens will be distributed in addition to ETH rewards. This distribution is proportional to the staking points earned, providing stakers with both ETH and token-based rewards.

Users who engage with partners' tasks are rewarded in $onchain tokens, creating a mutually beneficial model that drives ecosystem engagement. At its previous state, Chain Game has reached over 2 million daily active users, with 6m unique users in total.

A special airdrop will be given to early adopters of the L3 Score, with tokens distributed in line with engagement level and the number of earned points. The snapshot for this airdrop was taken on November 11, 2024.

Financial Health

Understanding your onchain token's financial health is crucial for its success.

Transaction data provides a clear picture of your token's activity, helping you identify trends and areas for improvement.

Credit: youtube.com, Crypto Tokenomics Explained: The Key to Smart Crypto Investing (Token Economics)

Exploring sales volume reveals how well your token is being traded, giving you insight into its market demand.

Royalties earned/lost give you a clear understanding of the financial performance of your token, helping you make informed decisions.

Marketplace activity shows you where your token is being bought and sold, allowing you to optimize your marketing efforts.

Entry price is a critical metric for token investors, as it determines their initial investment and potential returns.

Wallet-level details provide a granular view of your token's financial activity, allowing you to track every transaction and movement.

Onchain Wizard and Tools

The Onchain Wizard is a powerful tool for analyzing onchain tokenomics, allowing users to visualize and interact with token distribution, supply, and burn data.

By leveraging onchain data, the Onchain Wizard helps users identify trends and patterns that can inform investment decisions.

Token distribution can be visualized using the Onchain Wizard's token distribution chart, which displays the percentage of tokens held by different wallets.

Credit: youtube.com, A Guide to On-Chain Analysis and How It Works

This chart can be filtered by wallet type, such as exchanges, wallets, and other entities.

The Onchain Wizard also provides a token supply chart, which shows the total token supply and the number of tokens in circulation.

This data can be used to calculate the circulating supply and the total supply of a token.

The burn chart provided by the Onchain Wizard displays the number of tokens burned over time, which can be used to calculate the total number of tokens burned.

By analyzing these charts and data, users can gain a deeper understanding of a token's onchain tokenomics and make more informed investment decisions.

Overview

Onchain tokenomics is a system that governs the behavior of digital assets on a blockchain. It's a set of rules that dictate how tokens are created, distributed, and interact with the network.

Token supply is a crucial aspect of onchain tokenomics, and it can be fixed or variable. For example, a fixed supply token has a predetermined number of tokens that will ever be created.

Credit: youtube.com, Story Protocol (IP) Crypto Overview: Tokenizing IP Onchain

The total token supply has a direct impact on the token's value and scarcity. A fixed supply token can increase in value over time due to its scarcity.

Token distribution is another key component of onchain tokenomics, and it can be done through various methods such as airdrops, private sales, or public sales.

Frequently Asked Questions

What is the proper tokenomics?

Proper tokenomics encourages long-term holding by investors, discouraging speculation and short-term sales. A well-designed tokenomics system can indicate a project's potential for lasting success.

How to check tokenomics of a token?

Check the project's official Whitepaper for detailed tokenomics information and engage with the community to gain a deeper understanding

Wilbur Huels

Senior Writer

Here is a 100-word author bio for Wilbur Huels: Wilbur Huels is a seasoned writer with a keen interest in finance and investing. With a strong background in research and analysis, he brings a unique perspective to his writing, making complex topics accessible to a wide range of readers. His articles have been featured in various publications, covering topics such as investment funds and their role in shaping the global financial landscape.

Love What You Read? Stay Updated!

Join our community for insights, tips, and more.