token-economics

name	token-economics
description	Design token economics — supply models, vesting schedules, emission curves, and incentive alignment
allowed-tools	["Read","Write","Grep"]
effort	medium

When to activate

• Designing a new token's economic model
• Planning vesting schedules for team and investors
• Designing emission/deflation mechanisms
• Modeling staking rewards and yield distribution
• Evaluating existing tokenomics for investment decisions

When NOT to use

• For simple ERC-20 token deployment without economic design
• For centralized points/rewards systems
• For regulatory compliance analysis

Instructions

1. Define token utility. Governance, access, staking, payment, or multi-purpose. Each utility affects demand.
2. Design supply model. Fixed supply (deflationary), inflationary (ongoing emissions), or hybrid (halving).
3. Plan distribution. Team (vested 3-4 years, 1-year cliff), investors (lock + linear vest), community (airdrop, rewards).
4. Design incentives. Staking APY, liquidity mining, protocol revenue share, buyback-and-burn.
5. Model value accrual. How does protocol success → token value? Fee switches, burn mechanisms, staking locks.
6. Simulate scenarios. Model bull/bear markets. What happens at 10x and 0.1x adoption? Stress test emissions.
7. Document tokenomics. Whitepaper section with charts: supply schedule, vesting timeline, emission curve.

Example

Token: $PROTOCOL
Total Supply: 1,000,000,000
Type: Fixed supply with protocol buyback

Distribution:
  Community Rewards:  40% (400M) — linear emission over 4 years
  Team:               20% (200M) — 1yr cliff, 4yr vesting
  Investors:          15% (150M) — 6mo lock, 2yr vesting
  Treasury:           15% (150M) — DAO governance controlled
  Liquidity:          10% (100M) — initial DEX liquidity

Value Accrual:
  - 10% of protocol fees → buyback and burn
  - Stakers earn 50% of protocol fees (ETH)
  - Target staking APY: 8-15% based on participation rate

Emission Curve:
  Year 1: 100M tokens released
  Year 2: 80M tokens released  
  Year 3: 60M tokens released
  Year 4: 40M tokens released (end of emissions)