Tokenomics is the operating logic of a protocol. It explains why a token exists, how value moves, and how a system remains predictable under stress.

What this document is

A practical guide for founders. It outlines our process for designing token economies that align purpose, incentives, supply rules and market structure without relying on hype or one-off tricks.

Why projects fail

Many tokens drift below their listing price in months. Common causes are unclear utility, unmanaged supply releases, and incentives that reward extraction over contribution. A balanced model does not promise perfection; it removes avoidable failure modes.

What a full design covers

• Purpose and utility of the token
• Economic model: allocation, issuance, circulation, and shocks
• Fundraising setup and round design that doesn’t fight the economy
• Value creation and accrual paths that can be explained and audited
• Value capture that is credible without extreme assumptions
• Incentive system that directs behavior toward outcomes

There is no perfect model. Only trade-offs made explicit, measured, and maintained.

How we work — six phases

Phase 1 — Discovery and fundamentals

• Review core documents and define a source-of-truth
• Map stakeholders and utility flows
• Outline listing and liquidity assumptions where relevant
• Write down desired and undesired behaviors up front

Phase 2 — Audit and initial design

• Check inflation, dilution risk, release cliffs, and fairness
• Draft base supply mechanics and round structure that can be defended

Phase 3 — Economy design

We finalize allocation and vesting to fit target usage and float. Linear vesting often leaks value; S-curve or KPI-based schedules usually fit better when paired with clear contribution rules.

Phase 4 — Validation and optimization

• Validate against standards and comparable models
• Tune parameters for inflation control, release pace, and balance across participants

Phase 4.1 — Materials for investors and community

• Interactive scenarios for supply, releases, and incentives
• Investor-focused note on risk, runway, and safeguards
• Community-focused note on utility flows and rights
• Valuation framing using scenarios, velocity, and relevant comps

Phase 5 — Incentive systems

Identify participants and actions that create value. Reward contribution, not churn. Where possible, automate criteria in contracts rather than relying on discretion.

Phase 6 — Modeling and simulation

We model to understand what can happen, not to predict a single path. Simple spreadsheets are enough for quick sanity checks; for feedback-heavy systems we use simulations to expose edge cases before launch.

Design notes you can reuse

• Choose utility first, supply second. Supply without use becomes a liability.
• Keep reference liquidity simple; avoid fragmentation early.
• Publish schedules and stick to them. Surprise is expensive.
• Document rights and limits in one place so anyone can reconcile the numbers.

If you are building now

Use this outline as a checklist. A balanced model is one you can explain, simulate, and adjust without breaking the whole system. If you need a second set of hands to get there, we are happy to help.