🔍 Did you know that 95% of projects will eventually fail?
🔹 Only 5% of crypto projects survive and bring 10-100x returns.
🔹 The difference lies in " Token Economics"!
As an angel investor, I analyze the token economic models of different projects every day.
Today, I will share the **ultimate Token Economics Guide to help you avoid pitfalls and find the currencies with real potential! 👇
📊 Why are token economics so important?
✅ Excellent Token Economics = 100x Opportunity
❌ Bad Token Economics = Assets Depreciate 90% in One Year
🔹 Understanding Token Economics is the key to making wise decisions in the crypto market!
🔹 If you don’t understand token economics, your investment is just gambling.
📌 So, how to analyze the token economics of a project?
Let’s start with the basic indicators 👇
📌 Key indicators analysis
When you look up a coin on CoinMarketCap, you’ll see this:
📍 Circulating Supply - The number of tokens currently on the market
📍 Total Supply - The maximum supply of this token
📍 Market Cap - The total value of tokens in circulation
📍 Fully Diluted Valuation (FDV) - The total value of all tokens assuming they are in circulation
🔹 These indicators affect the trend of token prices, and it is crucial to understand them!
🔥 Inflationary vs. Deflationary Tokens: Which is More Valuable?
💡 Inflationary Tokens: The supply continues to increase, which may cause the price to fall.
💡 Deflationary Token : Reducing supply through buyback and destruction can theoretically push up prices.
📌 But in reality, prices are affected by demand and market sentiment, and cannot be judged solely by the supply mechanism!
📌 The key lies in how Token implements deflation and whether there is sufficient market demand!
Token Issuance & Investor Allocation
🔍 How are project tokens distributed? There are two modes:
1️⃣ Pre-mining: some tokens are allocated to early investors and teams (⚠️ high selling pressure risk!)
2️⃣ Fair Launch: Everyone gets tokens at the same time (⚡ More decentralized)
📌 Key questions:
✔️ Are early investors overrepresented?
✔️ Is the token distribution reasonable?
✔️ Do private placement investors have to lock up their positions for a long time?
If most of the tokens are given to investors and they sell them after the launch, you may become the "bag holder".
How to judge the long-term stability of a project?
🔹Check TGE (Token Generation Event) distribution: Usually 10-20% of tokens are unlocked in TGE, and the rest are distributed through "lockup + linear release".
🔹Vesting and Cliff: If a project releases tokens too quickly, the price will collapse quickly!
🔥 How does the token value grow? Four core driving forces
1️⃣ Store of Value - Bitcoin is regarded as "digital gold" due to its scarcity and has long-term investment value.
2️⃣ Community Power (Community)-Many Meme coins have soared due to community support, and activity determines market heat.
3️⃣ Utility - Tokens can be used for payment, staking, governance, etc., which determines long-term demand.
4️⃣ Value Accrual - Staking, profit sharing, lock-up rewards, etc. can stabilize token prices.
📌 A project must have at least 2-3 core driving forces to achieve long-term growth!
🚀 Conclusion:
How to filter 100x tokens?
✅ Check total supply, circulation (is the supply reasonable?)
✅ Analyze Token distribution & vesting period (will early investors dump the stock?)
✅ Research token release mechanism (deflation or inflation?)
✅ Evaluate market demand & community activity (are users willing to hold long-term?)
💡 Want to make big money in the crypto market? Start by understanding Token Economics! 🔥
