📊 How to analyze tokenomics?

What should you know about tokenomics before investing in a token? We described several important metrics that will help you to make the right choice on investments. These metrics affect token price in short- and long-term perspectives.

♻️ Utility

It describes how a token can be used and its relation to a project’s service or DApp. If a token is used in a platform operation with the growth of the platform the token price will grow too. Also, the utility can be described by the following questions:

🔹 what role does the token play in a project

🔹is the token important for the functioning of the network

🔹will the token’s utility grow in the future

🔹how many ways of using token has to be attractive for buying

The more useful token is the more its price will be in the future.

🌐 Token Distribution

Projects have a scheme on how tokens are distributed among a community, a team and advisors, how many tokens go for private and public sales, and how many tokens will be spent for marketing.

The more tokens are held by a team and advisors the more tokens are vulnerable to other users. The amount held by a team shouldn’t exceed 60%.

A project should provide users with a schedule for tokens’ distribution. Every next stage of distribution should last shorter than the previous one as the token price is getting higher and late investors are not ready to wait while they have already spent a big amount of money.

It’s necessary to know the plan of unlocking tokens because it affects demand and token price.

⚖️ Demand and Supply

How many tokens will be issued in general, how many tokens are in circulation at the moment and how quickly are they issued — these are the main questions which help to analyze token supply.

As the number of tokens decreases, their price increases. That is deflation. And if a project issues a big amount of tokens their price decrease. That is inflation.

Besides supply in general a project can regulate a token circulation with a burning mechanism. To raise demand and a token price a team burns some amount of their tokens. This transaction is broadcasted on a blockchain and helps to control the token price.

In terms of demand, you need to know how the project makes its token attractive to users, and how it stimulates them for buying and holding tokens. Demand is determined by ROI and the social value created by social media, communication and users’ involvement. Projects have farming, staking, and bounty programs to motivate users to be tokenholders for as long as possible.

🟦 So let’s conclude what a successful token should be:

🔹useful for a project ecosystem

🔹inflation-resistant

🔹perspective and scalable

🔹high priced

🔹listed on exchanges

And you know what? MMPro token is a perfect idea to invest in!