Crypto refers to digital currency created by cryptography, a mathematical technique to secure information by changing it into a form that is unreadable without knowing how it was encoded. This is used to create digital currency that is created, exchanged, and overseen by a distributed peer-to-peer network.
More background on crypto and modeling tokens 👉
Crypto exists on a blockchain, a digital ledger of transactions, designed to be transparent, permanent and immutable. Companies that are building blockchain technology are companies with traditional legal status and ownership structures, and may have a token that is distributed, exchanged, or burned in the use of the technology, and may be purchased, sold, and traded by people (possibly, users of its products).
From a modeling perspective, out typical goal is to model the initial allocation and the distribution of tokens over time. This represents the project's tokenomics; starting from an initial allocation, how will the tokens be distributed over time to various parties, based on a forecast of the project fundamental structures for issuing, earning, and burning tokens over time.
Typically we are not modeling price, which can be exogenous from the protocol’s underlying operations because of speculation.
This tool is intended to be a base for building a forecast of a project's tokenomics, starting with an initial allocation and then modeling the changing allocations over time based on the changing demand and supply of tokens over time. Building a model of the supply over time is more complicated than what this model is intended to be; modeling the mechanics of the product and user behaviour that lead to the changing supply of tokens will be something custom to your business, and this tool is just a starting point to building that more complicated model.
