Tokenomics is the science behind the token allocation of a cryptocurrency project. It directly correlates to the success or failure of a cryptocurrency’s adoption in real life, yet it is one of the fundamental strategies many choose to ignore. Therefore, before making any investment into a currency, its tokenomics need to be thoroughly evaluated. The two critical areas behind tokenomics that are crucial to the longevity of a project are:
Who gets the tokens? Are a large portion of tokens going towards the founders and developers of the project? If so, this poses various problems. The team may not want to continue developing the project as they have already been financially compensated for their time. This would also lead to potential rug-pulls from crypto whales, leading to unpredictable sell-offs where the developers and large holders of the token sell, causing huge downwards pressure on the token.
It might seem obvious, but many investors buy into projects that sound authentic but leave the token itself with no actual use. Therefore, the token must serve a purpose, and this must be clearly explained in the project’s white paper.
A crypto whale is an account with multiple millions worth of dollars of a particular crypto asset. This leads to price manipulation as one single account can have a considerable influence over short term price action, particularly in newer low-cap coins like Mountanaz.
Mountanaz, the ‘Cl-Everest’ new DeFi Protocol?
Mountanaz (MNAZ) is set to take centre stage as we slowly roll into Q3 2022. And the DeFi project does boast some Mount Everest level tokenomics. Capping at 50 million tokens, less than Ethereum, MNAZ immediately grabs the attention of any tokenomics-focused investor. Moreover, such a small number of total circulated coins generally gives greater confidence to those buying the coin in its ICO.
The MNAZ token also shows real applications in its ecosystem. The token is needed for governance rights, for borrowing/lending and is given as rewards throughout the system. For an early DeFi project, the token really holds some impressive traits.
Boasting only 11.6% of the total token supply being given to the project developers, this dramatically reduces the risk of developer rug-pulls.
Furthermore, Mountanaz has developed an anti-whale feature ensuring that no single transaction from a wealthy whale can dump on the market.
Dogecoin – The Contrarian Tokenomic Approach
While the two coins differ vastly, the contrasting tokenomic approaches form an interesting angle. With a current supply of 132 billion circulating tokens with a guaranteed extra 5 billion to enter circulation each year, it would seem that DOGE has some of the worst tokenomics fundamentals. But this is not necessarily the case. If the Dogecoin token were to be used commonly for the buying and selling of goods and services, it would dissuade individuals from holding the coin forever as there would be inflationary pressure on it – the total circulation is not fixed, it is rising. This ultimately gives assets with an infinite supply of tokens a purpose as there is less benefit of holding the token forever and persuades those holding the token to spend it as its value should, over time, decrease.
If you have been looking for a strong DeFi protocol to get involved with while its marketing campaign is still in its infancy, then keep an eye out for Mountanaz’s public sale as they roll into Q3.
Learn more on Mountanaz here:
Keywords: Mountanaz, MNAZ, DOGE, Dogecoin, DeFi, Tokenomics, Rug-pull, crypto Whales