Why tokenomics is really important:
· Good tokenomics: +10,000% in one year.
· Bad tokenomics: -90% in one year.
In this 🧵, I will share all the secrets on how to analyze different tokenomics 👇

Today, I want to discuss a crucial topic that can save you hundreds or even thousands of dollars.
Learn from the mistakes of others.
When I didn't understand how tokenomics really works, I made a few poor investments that are still down 80% from my entry.

Without grasping the tokenomics, any buy is just a gamble on favorable price movement.
That's why avoid trading blindly, or you could face serious losses!

When evaluating a potential investment, on the page of a token you see this:
· Market Cap
· Fully Diluted Value
· Circulating Supply
· Total Supply
Each of them is crucial for informed decision-making. Here's why ⬇️

These are known as basic supply indicators.
Grasping these indicators helps you evaluate the token's potential.
It’s essential to comprehend how each one functions and their effects on the price of crypto.
➬ MC: value of circulating supply in dollars
➬ FDV: value of total supply in dollars
➬ Circulating Supply: tokens currently in circulation
➬ Total Supply: total possible existing tokens

Next, we will discuss the three main factors that determine the launch and success of any token nowadays:
① Allocation of tokens
There are 2 ways to do it:
1. Pre-Mined - shared among early backers, the team, and advisors
2. Fair Launch - an equal opportunity for everyone to purchase
In today's market, the majority of tokens are pre-mined.

If 50% is allocated to investors and there is a 100% TGE, investors might dump the token, leaving you as exit liquidity.
Therefore, it's crucial to understand:
· TGE allocation
· Cliff period
· Vesting period

Token Generation Event (TGE) marks the occasion when tokens are officially released.
TGE allocation refers to the proportion of tokens distributed among individuals, typically ranging from 10-20%.
A cliff is the initial span following the TGE, serving as a pause before subsequent vesting begins.
Vesting signifies the month-by-month progressive distribution of token percentages.

② Distribution of a token
Common distribution receivers include:
➬ Airdrop
➬ Marketing
➬ Public sale (retail investors)
➬ Private sale (investors, KOLs, etc)
➬ Ecosystem (staking, rewards, etc)
But there's also more 👇

Lately, projects have been embracing a strategy that involves a modest TGE (no more than 20%), a subsequent cliff period of a few months, and over a year of vesting.
This approach is better suited for long-term project success.
It's really important to verify these details before investing.

③ Demand
On the other side, for any token to thrive, there must be demand.
That's what drives purchasers towards it.
Consider the US dollar.
Even though it faces notable inflation, folks continue to acquire it because it's essential for daily life.

In general, four factors drive demand for tokens:
1. Community Support
As observed in recent cycles, a strong community can significantly drive demand. Memecoins, for instance, have surged in value solely due to community.
2. Store of Value
Many people purchase cryptocurrencies to store their wealth, much like investing into digital gold. Bitcoin is a prime example of this.
3. Utility of a Token
Tokens that offer utility tend to attract buyers. A straightforward example is staking, where holding a token provides specific benefits.
4. Value Generation
People seek tokens that offer real value. Staking allows users to lock their tokens and earn rewards at regular intervals, which also benefits the network. Additionally, holding tokens can lead to rewards, airdrops, and other incentives from projects, benefiting all parties involved.

Additionally, it's crucial to understand who is holding the asset, regardless of high demand.
Is it a strong community or are there dumpers?
This can be challenging to determine, because you need to engage with the project's community and analyze it carefully.
But it's definitely worth it.

When all is said and done, keep this in mind: even with unfavorable tokenomics, a token can still pump very high, and the opposite holds true as well.
Keep this outcome in your thoughts!
Welcome to crypto, where even the most absurd scenarios can come true.

In summary:
To avoid making blind investments and ending up with unwanted tokens, remember to always look at 👇
· Total Supply & Circulating Supply
· Allocation & Distribution
· Vesting period
· % Emission
· Demand
After conducting your own thorough analysis, you'll be able to determine if the project is worth investing in.

Since my account has grown a lot, I can’t share 100x gems in public anymore, so I decided to make my tg channel private.
But you still have a little time to join before I close it for good:
➬ t.me

If you found this thread helpful, don't forget to:
➬ Follow me @ardizor for more.
➬ Like/Bookmark/Repost the quote below if you can:
x.com