Tokenomics
A token’s economic rules: supply, issuance, allocation, unlocks and uses.
Supply sets the price as much as demand
Tokenomics describe a token’s economic rules: how many exist, how many will be created, who holds them, when they unlock and what they are used for. Two projects with the same unit price can have unrelated valuations.
The gap between market cap (circulating supply) and fully diluted valuation (maximum supply) measures future selling pressure: tokens held by teams and early investors often unlock gradually.
Valorisation diluée (FDV) = prix × offre maximale
- Market cap = price x circulating supply.
Worked example
A token at $2
- Circulating supply: 100 million, maximum supply: 1 billion.
- Market cap: 2 x 100M = $200M.
- Fully diluted valuation: 2 x 1bn = $2bn.
- 90% of the tokens are still to be issued or unlocked.
To hold its price, the token will have to absorb ten times more supply.
Common mistakes
- Judging a token by its unit price, like a share, without looking at supply.
Questions and answers
Where can I find the unlock schedule?
In the project’s white paper and documentation; specialised sites also track upcoming unlocks.
Notitia newsroom · education, not investment advice.