Know your numbers!
A token’s success depends heavily on its underlying economics, which can make or break a project. Therefore, it is critical to conduct a comprehensive audit of the analyzed tokenomics early in the development process or before investing (buying in token rounds or on DEX or CEX).
In order to help clients and investors stay informed about potential risks associated with investing in certain cryptocurrencies, we perform tokenomics audits that scrutinize every aspect of the token infrastructure.
We will evaluate each component individually, such as token allocation (including, but not limited to, token sales, team, and rewarding allocations), token emission (token minted per block or second), distribution mechanisms (airdrop, staking, farming, etc.), and vesting schedules.
Tokenomics, short for "Token Economics". It is the set of elements that give value to a crypto or token and from which investors obtain information. Token allocation: the quantity (%) of tokens allocated for the investors, team, reward, development, etc. Token distribution: the method by which the token is distributed in the market (fair launch, token sale, airdrop, staking, and/or vesting schedules). Token emission: tokens minted through smart contracts (tokens/block). Vesting period: is a lockup mechanism used to reduce the selling pressure in the early stages and prevent large quantities of tokens from being sold.
MHL Solutions will serve as an official advisor to your project, team, or persona, depending on the entity that signs the agreement.
Tokenomics development, full/one-time consulting, in-depth project analysis, custom investment plan, and secondary services are not included in this service.
Why hire tokenomics experts?
Hiring a tokenomics expert can provide valuable insights and benefits. A tokenomics expert:
- have in-depth knowledge and experience in developing token economies and analyzing token distribution, supply, utility, and use cases.
- can provide a holistic assessment of the token ecosystem, by identifying strengths, weaknesses, and potential risks.
- can propose mechanisms to enhance user engagement, liquidity, and ecosystem sustainability.
- keep track of market trends, competitor token economies, and industry best practices. They recommend strategies to improve competitiveness and adapt to market conditions.
- leverage market data, user feedback, and economic indicators to assess the performance of tokenomics and make informed decisions.
By hiring a tokenomics expert to analyze the tokenomics of your project or a project in which you intend to invest, you can gain a deeper understanding of the strengths and weaknesses of the token economy, identify areas for improvement, and receive expert recommendations on how to optimize the project’s tokenomics for long-term success.
Services provided during tokenomics audit
- We’ll begin by thoroughly reviewing any provided documentation, such as pitch decks and social media activity, to gain a better understanding of the project.
- Comprehensive analysis to learn about industry trends, competitor strategies, etc., in order to provide tailored solutions that meet or exceed expectations.
1. Token Economy
- After conducting our research we analyze the token utility and use case, comparing them to other projects in the market that are trying to solve the same problem or targeting the same audience.
- We also analyze the token ecosystem and how it is linked to a certain platform to establish its credibility, functionality, and purpose.
2. Token Metrics
- We start by putting down the numbers on a spreadsheet and analyzing token emission and distribution mechanisms to determine the inflation rate.
- We analyze the token allocation and vesting schedule, looking for signs of fairness among investors and the team and long-term sustainability.
Depending on the client:
- Project founder: We will write down a document in which we will report our discoveries in order to give you a fair Audit from an outsider’s perspective so that you can make improvements before deploying your smart contracts.
- Investors/VCs: We will write down a document in which we will report potential weaknesses of the analyzed tokenomics so that you can make an informed decision about whether to pursue an investment or not.
Why hire us?
We take into account any detail, not only of the token but also of the project it is associated with, such as marketing strategy, branding, community engagement, partners, etc. When it comes down to the numbers, we are very thorough.
Everything must add up! When analyzing tokenomics, we strive to place ourselves in the roles of both the investor and the project founder (or tokenomics developer) to gain insights from two distinct viewpoints, seeking fairness and token stability. We ask ourselves why the team made specific decisions and how investors might respond to them.
We aim to ensure that both investors and project founders have confidence in the sustainability of the project. This is important for creating long-term value for all parties involved. Our thoroughness in analyzing every detail reflects our commitment to providing unbiased insights that can assist the client’s decision-making.