HOW TO RESEARCH INFORMATION ABOUT A PROJECT'S TOKENOMICS:

[TradeCoinD2]

This article will provide you with basic concepts and insights into how token allocation and release schedules work. It's especially useful for newcomers who may not be familiar with the term "tokenomics."

In addition to supply and demand factors and token utility, you should also understand the following elements:

1. Token Sale:
Token Sale is a method for project teams to raise funds for project development. It helps us determine the price at which they obtained tokens, including various key rounds:

- Seed Sale: This is the earliest round where investors, often angel investors or close associates of the project team, acquire project tokens. Since tokens are sold at the lowest price during this round, it carries the highest risk and potential profit.

- Private Sale: In this round, tokens are sold to investors or funds like Alameda, Binance Labs, Coinbase Ventures, or A16z, and the price is higher than in the Seed round. This round decides whether large funds invest in the project based on its progress during the Seed round.

- Public Sale: As the name suggests, this round is for the general community. A well-structured tokenomics plan should lock tokens from the Seed and Private Sales for a certain period to ensure fairness because those who invest later (Public Sale) pay a higher price. If early investors (Private, Seed Sales, etc.) sell immediately, it can harm later investors.

2. Token Allocation:
Token allocation varies depending on the project and its fields. Here is a reference table:

Team: 15% or less
Advisors: Less than 10%
Early Investors: Less than 25%
Public Sale: Less than 10%
Marketing: 10% or less
Ecosystem: At least 10%
Treasury: At least 15%
Liquidity: 20% or less

3. Team:
The core project #DevelopmentTeam  includes developers, founders, and employees. The percentage of tokens they hold should strike a balance:

Too much control by the team can lead to a lack of fairness.
Too little can result in a lack of incentive for the team to develop the project.
Usually, the team allocation falls between 15% and 25%.

4. Treasury:
The project's reserve for future needs, including employee salaries, daily expenses, and product development. A reasonable allocation is around 25%.

5. Seed/Private Sales:
The initial investors who participated in early rounds. Reasonable holdings are around 15%, and caution should be exercised with projects allocating over 20% (as they could be too centralized).

6. Public Sale:
This round is for the community. Usually, it is allocated around 5% because tokens are often unlocked immediately when listed on exchanges, making it easier for early investors to dump tokens.

7. Marketing:
Allocated for marketing activities such as airdrops, retroactive rewards, etc., to reach investors. A typical allocation is less than 10%.

8. Advisors:
The advisory team allocated approximately 5% of the total token supply. An overallocation to advisors can create an imbalance if they have tokens from very early rounds.

9. Liquidity:
Liquidity is added to decentralized or centralized exchanges (DEXs or CEXs). Different projects have varying liquidity requirements, but a good allocation is around 20%, locked for over 2 years.

Token Release Schedule:
Tokens are often released in stages rather than all at once. Consider the following timeframes:

- Under 1 Year: Indicates a lack of long-term commitment to the project's development and may not be the best choice for investment.

- 3-5 Years: This is a reasonable timeframe for releasing 100% of tokens. It shows a strong team commitment and can attract new users.

Over 5 Years: May not be favorable, as the typical crypto project lifecycle is around 5 years, and the market is fast-paced with many projects coming and going.

In summary, this article has covered the essential components of a project's tokenomics. Understanding these elements provides a solid foundation for newcomers entering the crypto market. Thanks for reading!

Some Useful Websites:

Check token scam information: Moonarch, Honeypot, TokenSniffer

Check token release schedules: Token Unlocks, Vestlab

Check upcoming IDOs and ICOs: CryptoRank

Check Tokenomics: Messari