tokenomics

Tokenomics

Deep authority on token economic system design for crypto protocols: supply and emission modeling, vesting structures, bonding curves, liquidity bootstrapping, veToken governance models, staking mechanics, and incentive alignment. Use this skill when designing, analyzing, or auditing the economic layer of a blockchain protocol or DeFi application.

Core Concepts

Supply Schedule Design

A supply schedule answers: how many tokens exist at time T, and who controls them? The four canonical allocations are team/advisors (10-20%), investors (15-25%), ecosystem/treasury (30-40%), and community/public (20-40%). Every allocation should have explicit vesting.

import numpy as np
import matplotlib.pyplot as plt

def emission_schedule(months: int, initial_supply: float, target_supply: float,
                      decay_rate: float) -> np.ndarray:
    """Exponential decay emission — common for DeFi protocols."""
    t = np.arange(months)
    # Monthly emission decays geometrically
    monthly_emission = (target_supply - initial_supply) * (1 - decay_rate) * (decay_rate ** t)
    cumulative = initial_supply + np.cumsum(monthly_emission)
    return np.clip(cumulative, 0, target_supply)

# Curve-style: 43% emitted in year 1, halving roughly annually
supply = emission_schedule(months=60, initial_supply=0,
                           target_supply=1_000_000_000, decay_rate=0.85)

Key design tension: high early emissions bootstrap liquidity and users but create sell pressure. Low emissions reduce inflation but fail to attract liquidity miners. Common solution: front-load ecosystem incentives, back-load team/investor unlocks.

Vesting and Cliff Structures

Standard venture-backed token vesting: 12-month cliff, 36-month linear vest. On-chain enforcement via VestingWallet (OpenZeppelin) or custom schedules.

// Solidity vesting with cliff
contract TokenVesting {
    struct Grant {
        uint128 total;
        uint128 released;
        uint64  start;
        uint64  cliff;    // seconds after start before any tokens unlock
        uint64  duration; // total vest duration in seconds
    }

    mapping(address => Grant) public grants;

    function releasable(address beneficiary) public view returns (uint256) {
        Grant memory g = grants[beneficiary];
        if (block.timestamp < g.start + g.cliff) return 0;
        uint256 elapsed = block.timestamp - g.start;
        uint256 vested = elapsed >= g.duration
            ? g.total
            : (uint256(g.total) * elapsed) / g.duration;
        return vested - g.released;
    }
}