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Tokenomist Tasks: Finding Market Equilibrium.
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#demidas_education #tokenomics

In our previous post, we discussed the differences between building an economic model in Web3 and Web2. Today, we'll explore one of the key tasks of a tokenomist - creating demand and supply models for tokens that satisfy stakeholders both long and short term.
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· Demand and Supply Curves.

The graphs below illustrate the demand (D1, D2) and supply (S1, S2) curves. The intersection of these curves determines the equilibrium price (E1, E2) for a specific period. The demand curve shows how many tokens users are willing to buy at various prices, while the supply curve indicates how many tokens are available for sale at different prices.

· Demand Model.

The demand model, or utility model, tells us why tokens are needed. The utility of a token can be derived from its functionality within the ecosystem, such as access to services, voting rights in project governance, or participation in project revenues. The more applications a token has, the higher its demand is.

· Supply Model.

The supply model describes the means for obtaining the token and how its emission is regulated. It is important to consider the number of tokens in circulation, methods of distribution (e.g., through staking or mining), and the solutions, reducing token inflation (e.g., token burning).

· Market Equilibrium.

Market equilibrium is achieved at the intersection of the demand and supply curves. At this point, the equilibrium price and trade volume are established. The main question we face is whether we are satisfied with this price and if it meets the liquidity providers' needs.
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· Factors Influencing Demand and Supply.

Demand may vary based on the token's utility, news about the project, the overall market condition, and competitor behaviour.

Supply may change based on the number of tokens issued, staking solutions, and decisions by major holders (whales).

· Changes Over Time.

It is crucial to understand that the situation varies. Today's equilibrium may not meet tomorrow's market conditions. This requires continuous monitoring and adjustments to the project's economic model.

As the famous British economist John Maynard Keynes once said:

"In the long run, we are all dead."

This means that if there is a significant token unlock in your project tomorrow, and you have not prepared measures to manage this situation, such as a staking program, an NFT sale, or agreements with major holders (whales) to prevent them from dumping tokens on the market, you will face serious problems.

The long-term stability of the project's tokenomics doesn't matter in this scenario.
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Thus, creating an effective economic model in Web3 requires a deep understanding of microeconomic principles, the laws of demand and supply, and consideration of all ecosystem participants' interests.

deMidas x Alexey Karanyuk (gnts.ai).

Media about Web3 VC: @demidas_com

Venture Capital Explained: From Adventures to the Crypto Revolution.

#demidas_movie

The realm of venture capital has been evolving for a long time. There have always been structures promoting innovative concepts.

Today, VC has transformed from an isolated state into a self-sufficient system, functioning as a separate segment of the economy.
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· How have cryptocurrencies changed the perception of venture capital?

· How are modern VCs structured?

· Why has the arrival of web3 enabled investing in the internet?

We discuss this in our new video.

▶️ Watch the video.

Web3 has allowed to change the rules of the game and elevate venture capital to a new level.
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We are also gathering a selective closed community with investors, founders, and web3 experts. If you are interested, you can fill out the form on our waitlist.

> Fill out the form.

Media about web3 VC: @demidas_com

Tokenomics: Understanding, Analysis, Application — №2
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#demidas_education #tokenomics

Continuing our series of posts, we shift from the topic of tokenomics to understanding cryptoeconomics.
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Differences Between Tokenomics and Cryptoeconomics

The term "cryptoeconomics" was first introduced by the Ethereum community (2014–2015).

The first documented use of this term is attributed to Vlad Zamfir in his 2015 presentation titled "What is Cryptoeconomics?":

"A formal discipline that studies the protocols regulating the production, distribution, and consumption of goods and services in a decentralized digital economy. Crypto-economics is a practical science that explores the development and characteristics of these protocols."

Vitalik Buterin, however, approaches crypto-economics from a narrower and more pragmatic perspective, as a "methodology for building systems that attempt to guarantee certain properties of information security."
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It is important to note that there is a significant distinction between the concepts of tokenomics and crypto-economics. Despite the lack of a universal standard in defining these terms, their main differentiation usually occurs based on whether or not a native token is present in the system.

Tokenomics is a key element in the world of cryptocurrencies, associated with the development of an economic system around a specific token. This process may include defining methods for issuing, distributing, and managing tokens.

· For example, if we work together with TON Foundation, our task will be to develop tokenomics for their native token.

On the other hand, cryptoeconomics refers to a broader concept, involving the creation of a system that can accept payments in various cryptocurrencies.

· As an example, consider the development of an online store that can accept payments in TON, even if the store does not have its own token.
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Thus, cryptoeconomics and tokenomics are interconnected, but focus on different aspects of the cryptocurrency economy.

While tokenomics is oriented towards creating and developing an economy around a specific token, cryptoeconomics deals with the creation of systems that use cryptocurrencies in a more general context.

deMidas x Alexey Karanyuk (gnts.ai).

Media about web3 VC: @demidas_com

Tokenomics: Understanding, Analysis, Application — №1
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#demidas_education #tokenomics

We are starting a series of posts, diving deep into tokenomics. We aim to achieve two main objectives through this process:

· Provide the necessary theoretical foundation for understanding and analyzing the tokenomics of projects;

· Aid in the difficult process of creating tokenomics for a startup from scratch.

The deMidas team and Alexey Karanyuk, founder of Giants Tokenomics (gnts.ai) participated in writing.
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Concept of Tokenomics

Tokenomics is a broad concept that combines different approaches and theories that help define the value, purpose, and usage of tokens within a specific ecosystem.

It is important to understand that tokenomics is not a static structure, but a dynamic system that can change and adapt depending on various factors.

All components of tokenomics must be carefully developed and thought out, starting from token issuance and distribution mechanisms, to their potential use and methods of ensuring liquidity.
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By integrating the basic economic elements that fit into the blockchain structure, the task of a token economist is to answer the following questions:

· Behavioral economics, economic sociology: What drives each participant to make decisions about swapping/staking/providing or withdrawing liquidity/selling native tokens/voting?

· Microeconomics: What will be the token price volatility, real and expected returns? What conditions for stakeholders do competitors have? What new offerings can be made?

· Macroeconomics: What will be the equilibrium of supply and demand, and how will monetary factors such as inflation affect it?

· Corporate finance: What will be the project's P&L, what return is expected for the token investor? Where are the possible losses in the project's budget?

· Economic design, system dynamics, game theory: How will users interact in a complex system, and what will change when the structure of the economic system changes?
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Answers to these questions are not just important; they will serve as the foundation for creating tokenomics.

They will define the key aspects and principles on which the entire tokenomics system will be built.

Media about web3 VC: @demidas_com