Portfolio management - one step ahead

Designing a token economy is hard. There are many actors, each with their own incentives. Investors, team, community—all of them create a dynamic system that is extremely hard to predict but at the same time key for the financial success of a project.

To address these issues, TokenOps is establishing a partnership with Cenit Finance, a simulation company focused on tokenomics design modeling. In combination with TokenOps' real-time data platform, this offers a huge opportunity to ease both tokenomics design and deployment, as well as portfolio management, by anticipating token risks and mitigating them before they happen.

Why simulate your token economy?

Simulating your token economy is key to understanding the effect your decisions on token design will have on the overall economy. Several areas benefit from this:

From a founding team perspective, it helps you understand the pressure your token will face over time, allowing you to discard poorly designed tokenomics early. Once you have an idea of your final token economy design, it helps you calibrate which fees to capture with your token utilities and fine-tune every other parameter, such as the vesting schedule, for your economy.

For those whose token economy is well-defined, standing out from the crowd is key for the fundraising process. The market is reluctant to provide the liquidity and funding seen in the past, but top projects are still getting a lot of attention. Projects that can showcase the power of their token economy are finding a much easier path in this fundraising context.

In addition to protocols generating their own simulations, simulation is also a key aspect of portfolio management for investors. This allows them to improve their due diligence processes and make better data-informed decisions both before investing and once the token is live.

Cenit's platform offers a simple-to-use and understandable dashboard where, given a token design, we can change different parameters and forecast how the economy will evolve over time to see whether it is sustainable and the vesting schedule is balanced with the token demand coming from the utilities.

The platform allows for the easy recreation of hundreds of scenarios based on different values of the design parameters, such as the vesting schedule or the fees charged, and behavioral hypotheses, such as the expected volume of users or stakeholders' speed of token dumping, resulting in the most complete tool to understand a token economy in the market.

How to simulate your token economy with Cenit

The viability of a token economy can be determined through the combination of two major areas: token supply (allocations and incentives) and token demand (token utilities and usage of the value proposition by end users). Let’s see now how to introduce them into the simulation.

Start by defining your initial token allocation and vesting schedule on the Cenit Platform. Do not worry if it is not final; the idea is to simulate multiple scenarios and test multiple combinations until you find the optimal solution.

Once the vesting has been completed, it is time to introduce the token utilities. The choice of utilities will heavily impact the behavior of the token economy. If you are not sure about how to select them, check out this post, or this other one:

• Tokenomics Design

• Tokenomics Modeling

On the Cenit platform, you can select different utilities for each of the different value propositions in your protocol. The expected size that a value proposition will have and how fees are distributed are extremely relevant to understanding its impact on the token economy.

It is also possible to allocate tokens or set up emissions as incentives for the users, service providers, or stakers of the various value propositions.

TokenOps real time data & simulations: an explosive combination

As useful as they are, simulations depend a lot on the right input data: having real-time data is an unfair advantage for your portfolio/tokenomics management strategy. Real-time data allows for more accurate and responsive simulations, enabling you to adapt to market changes and investor behaviors as they happen. This can be from:

• Token Price: Cenit predicts token price trajectory based on the rational behavior of your token economy. However, there are other forces in the market that can change this token price from one day to the following. While speculation is impossible to predict, understanding how your system will behave in the new conditions is important.

TokenOps API offers several key functionalities that allow for comprehensive tracking and analysis of token movements and vesting schedules:

• Claim Information: The API retrieves detailed information about claims on vesting contracts. This includes data on when and how many tokens are being claimed, providing insight into the liquidity being introduced into the market from vested tokens.

• Vesting Contract Details: The API provides access to comprehensive details about vesting contracts for specific blockchain networks. By supplying the chain ID and contract address, you can retrieve the full vesting schedule and understand how tokens are allocated over time.

• Grant Information: Detailed data about token grants associated with vesting contracts is available, including specifics on various events like claims and revokes. This helps in understanding the distribution and potential future supply of tokens.

• Insights into Vesting Contracts: The API offers valuable insights into the distribution and movement of tokens within vesting contracts. This includes historical data and trends, which are essential for forecasting future behaviors.

Thanks to this data, Cenit can extract valuable metrics and insights that are critical for effective tokenomics management:

• Pace at which investors sell their tokens: By analyzing real-time notifications and claim information, Cenit can determine how quickly investors are selling their tokens, which is crucial for understanding market liquidity and potential selling pressure.

• Pace at which airdrop recipients dump their tokens: Similar to investor sell pace, tracking real-time events and token movements allows Cenit to gauge the rate at which airdrop recipients are liquidating their tokens, helping in predicting market impact.

• Historical Behavior of Wallets: The detailed historical data provided by the API enables Cenit to track past behaviors of wallets involved in the token economy. This analysis helps in predicting future actions based on historical patterns and trends.

With the new data, you can update the initial hypothesis of your Cenit simulation, such as the initial stakeholders (investors, airdrop receivers) yearly sale, the volume of users that you will have, and how much they are spending monthly. With the updated information, your forecast will be way more accurate, and you will be able to anticipate the risks coming from a token.

Conclusion

In conclusion, the integration of TokenOps' real-time data capabilities with Cenit's advanced simulation platform offers an unprecedented advantage in the field of tokenomics. By enabling detailed analysis and accurate forecasting, these tools empower both project teams and investors to make informed decisions, mitigate risks, and optimize their strategies. As the digital finance landscape continues to grow and evolve, adopting such sophisticated technologies will be critical for achieving long-term success and maintaining a competitive edge. Embracing this approach ensures that your token economy is not only robust and resilient but also poised for sustainable growth in an increasingly complex market.