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Tokenomics Audit

After a meticulous examination of your tokenomics, we’ve prepared a light audit, pinpointing key issues that demand your immediate attention to maintain the seamless progression of the $SPT token with no unexpected complications.

We got your tokenomics info from here.

Issues with your tokenomics:

  • Inflation rate for year 1 is extremely high at 700%. This means that the supply of tokens will increase rapidly, leading to a decrease in your token value over time. This issue will make it challenging to maintain the purchasing power of $SPT tokens.
  • Please book a call so we can further elaborate on the severe impact of high supply shocks to your token price.
  • Please book a call so we can further elaborate on liquidity and other issues in your tokenomics.

Your Tokenomics Audit:

  • Scrolling down you will see the detailed audit of your current tokenomics design, all the charts and models ran were prepared just for you to identify the potential issues and consequences of them in a statistical manner. 
  • Each section has a detailed description for a more in-depth user experience.

In the context of cryptocurrencies, the allocation distribution plays a crucial role in the monetary policies of a token. It determines the process of creating, emitting, and distributing new tokens among various pools or shareholders. The allocation distribution mechanism governs how the token supply is managed and ensures a fair and transparent distribution of tokens to the different shareholders.

Unlocks vs Circulating Supply

Circulating supply refers to the number of tokens that are actually available for trading in the open market, and it is a key factor in calculating a cryptocurrency’s market capitalization.

It reflects the tokens that have already been mined or issued and are not locked in any kind of contract or held by the projects team or founders. For simplicity purposes, these are the tokens held in the general public’s hands.

The unlocked supply refers to tokens that are free from any restrictions and could be sold or moved at any time. This typically includes tokens that were initially locked due to certain conditions or agreements but are now free to be traded. 

However, just because tokens are part of the unlocked supply doesn’t mean they are actively being traded or are part of the circulating supply. Some holders may choose to hold onto their tokens for various reasons, which can result in a discrepancy between the unlocked supply and the circulating supply. Thus, while circulating supply gives a snapshot of the current market liquidity, the unlocked supply provides insight into the potential liquidity that could enter the market in the future.

We believe in the principle that Circulating Supply ≠ Unlocked Supply. In an effort to simulate less favorable scenarios, we operate under the assumption that all tokens vested to investors become a part of the circulating supply as soon as they are unlocked.

It’s important to note that this doesn’t always happen immediately. Often, investors must actively claim their tokens and withdraw them from a smart contract for them to officially enter circulation.

This chart separates the unlocked supply from the circulating supply each month for the first 4 years.

This chart shows the combined emissions by allocation type for the first 4 years. It also separates the circulating supply from the unlocks.

Note that for TGE we are taking a random date in the future if your project hasn’t launched yet.

This column chart shows the % of total supply released by allocation type each month, for the first 4 years.

Another important monetary policy that defines the rate, accelerations and velocity at which new tokens are introduced into the system through a process called vesting release schedule.


Token generation event (TGE):

Is the exact date when a project launches a token on an Exchange, centralized or decentralized. It is also the first date investors and the other pools can get tokens unlocked.


Cliff period:

The cliff, meanwhile, is a feature that ensures that the investors have to wait a defined time to start receiving the tokens, known as the lockup the most discussed term with vesting works as a durational lock placed on tokens ahead of the vesting schedule. It is primarily used for seed and private sale investors.


Vesting types:

  • Linear Vesting: The distribution of tokens in equal parts within a certain period of time is known as linear vesting. The time period can be days, weeks, months or even years.
  • Twisted Vesting: The distribution of tokens is random within a variety of time periods. The time period varies from days, months, quarters or even years. In twisted vesting, you don’t see a linear pattern in distribution. For example: 25% of 600,000 $EXAMPLE tokens can be released monthly for the first 3 months and then 75% of $EXAMPLE tokens can be released followed by a 6 months cliff. The twisted pattern is usually seen in Tier 1 projects or layer 1 blockchains to maintain token pricing.

This chart shows the combined emissions by allocation type for the first 4 years.

Your project has the following inflation rate:

399% inflation for Year 1.
112% inflation for Year 2.
41% inflation for Year 3.
18% inflation for Year 4.

Read more about Inflation and why we need to control it here.

This chart shows the year-over-year inflation rate and cumulative unlocks of your token for the first 4 years.

A sudden increase in the circulating supply of tokens is called a ‘supply shock’, which in most cases severely disrupts the balance of supply and demand in the market in a short period of time.

When a large quantity of tokens suddenly become available, the market’s ability to absorb the new supply plays a crucial role in price determination.

If the demand remains static while the supply skyrockets, the excess tokens will significantly drop the price of that cryptocurrency.

Read more about Supply Shocks and how sudden changes in circulating supply disrupt crypto projects here.

Your token unlocks until the end of the vesting period.

Supply shocks and their strength until the end of the vesting period.

Level up your tokenomics with Black Tokenomics

The in-depth exploration of your tokenomics has unveiled significant areas that require your immediate action. As we strive to empower your journey toward success, so timely and strategic moves are key.

We are eager to delve deeper into our findings with you and propose robust strategies tailored for enhancement. A detailed conversation would enable us to collaboratively address the challenges and optimize your tokenomics structure.

Let’s seize this opportunity to align our thoughts and translate them into actionable insights. Our team is ready and excited to take the next steps with you in fortifying your tokenomics design.