How to create a token economy?

1. Map out the actors
‍
2. Map out the protocol/company elements
‍
3. Map out the flow of value between all elements
‍
4. Assess where the demand and supply will stem from
‍
5. Work out where the sinks and injections are

6. Estimate velocity

7. Calculate the balance
‍
8. Work out where to implement fiscal and monetary policies


(Example economy designed by Simplicity Group)

ETH’s total supply keeps increasing while the price trends down. Whilst the great inverse correlation is not much more than correlation (i.e. there are other factors that are causing ETH price to decrease, such as the terrible market + FUD about the foundation selling), there is still some causation, in that there aren't enough burns.

Sell $11M worth but only receive $407K

A straightforward and undeniable lesson in liquidity vs. market cap:

1. Your influencers exaggerate their success
2. Your colleagues overstate their wealth
3. Your competitors inflate their prosperity
4. Your token isn't valued as much as you think
5. Crypto isn't actually as big as people think



Simplicity is beautiful isn't it

We invested $125K into a project,

its launch has now been delayed for nine months.


This is a familiar story for many investors in the space - angels, syndicates, and VCs alike.

The traditional venture model is no longer sustainable.

In this market, only hedge funds, liquid funds, and market makers are seeing any meaningful liquidity.


Your top priority should be profit - VC-backed easy exits are over.

The 8-step blueprint for designing a token economy

1️⃣ Identify the key actors.
- Who are the users, stakeholders, and participants?

2️⃣ Define protocol elements.
- What infrastructure will facilitate token interactions?

3️⃣ Map the flow of value.
- How will tokens move across the ecosystem?

4️⃣ Determine demand & supply drivers.
- What creates and sustains demand?

5️⃣ Define sinks & injections.
- How do tokens enter and leave the economy?

6️⃣ Estimate velocity.
- How fast will tokens circulate between participants?

7️⃣ Calculate economic balance.
- How do supply & demand stay in equilibrium?

8️⃣ Implement fiscal & monetary policies.
-What mechanisms will stabilize the economy?


----
Sure, you could design a token economy yourself, but we also recommend step nine:

let the pros handle it

Calendly

sorry

Trad science is broken. Can DeSci do better?

⬇️
Heard of DeSci but not really sure what it actually does?
What niche is it taking? What problems does it solve?

Tune in this Wednesday, March 26 at 3PM UTC to get all the answers.

You’ll learn:
— What DeSci is about
— How it could change funding, publishing & collaboration in science
— Why researchers, builders and crypto natives are paying attention

Amazing guests:
gwei_sha
jb87ua
hetu_protocol
MELOWILD
cow_chain

🔗 Set a reminder: https://x.com/i/spaces/1OwxWXyyXgVKQ

One hour in this space could save you weeks of research 🙂

We at Simplicity Group are excited to team up with Ziglu!

Not just because “simplicity” is part of their core - “Beautifully designed to make the complex effortless” - but because Ziglu makes exploring crypto, cash, FX, and even a Hot Pink card feel seamless.

From investing in 15+ cryptocurrencies to exchanging euros and dollars at great rates - Ziglu does it all, while keeping you safe.

Bullish

Our research team just released a shiny new article on how decisions actually get made in DAOs and Web3 projects.

Dive into Governance Mechanisms 101 for a quick breakdown of how on-chain communities stay organized (or sometimes don’t)

https://x.com/SimplicityWeb3/status/1904509056175218723

99% of projects simply do not require a token.

However, not being a necessity doesn’t mean it can’t add value. Instead, it highlights the need for strategic foresight

So does your project actually need a token?

Just a reminder that our researchers broke it down in one of our alpha articles

Would you say $BTC thrives in crisis?

Though it’s not a fail-proof idea, major volatility spikes like the pandemic crash in March 2020 often line up with big price moves, either up or down…

We at Simplicity don't aim for hard-sell tactics, aggressive marketing, and in-your-face promotion

Https://calendly.com/enquiries-simplicity/marketing

Onchain voting for asset delisting may be a step forward, but let’s not pretend this is decentralized when the Hyper Foundation’s validators control the majority of stake, 78.5% of it

If most votes are coordinated offchain by HL, how is this decentralized?

Top 10 protocols ranked by fees generated in the entire crypto space are very balanced: 2 stablecoins, 2 chains, 2 exchanges, 3 DeFi projects, and 1 infrastructure project

If you’re a VC, this is a good data point - Shovels always prevail in the gold rush.