The Curious Case of Token Unlocks

DEC 02, 2022 • 24 Min Read

Priyansh Patel

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Tokens are a financial innovation that confer either ownership or decision-making power to their holders. Token economics refers to the distribution, value accrual mechanism, emission schedule, and sinks associated with a token. A well-designed token economy helps good projects compound their growth by enabling a flywheel to bootstrap usage. If successful, the value generated by the project can be passed on to token holders.

While good token economics can complement good products, success really boils down to the product’s strength. Unsurprisingly, poorly designed token economies don’t help good projects, as they often serve as an added point of friction. Poor token economics with a poor product spells doomsday.

In the case of a good project with bad token economics, the market is bound to take advantage of the situation. GCR is a well-known trader from the last cycle, noted for topping the FTX PNL leaderboard and making several accurate market predictions. Tow

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