Book Image

Tokenomics

By : Sean Au, Thomas Power(GBP)
Book Image

Tokenomics

By: Sean Au, Thomas Power(GBP)

Overview of this book

Tokenomics is the economy of this new world. This is a no-holds-barred, in-depth exploration of the way in which we can participate in the blockchain economy. The reader will learn the basics of bitcoin, blockchains, and tokenomics; what the very first ICO was; and how over a period of 5 years, various projects managed to raise the enormous sums of money they did. The book then provides insights from ICO experts and looks at what the future holds. By comparing the past, current, and future of this technology, the book will inform anyone, whatever motivates their interest. The crypto shift of blockchains, ICOs, and tokens is much more than just buying bitcoins, creating tokens, or raising millions in a minute in an ICO. It is a new paradigm shift from centralized to decentralized, from closed to open, and from opaqueness to transparency. ICOs and the creation of tokens during the craze of 2017 needed a lot of preparation, an understanding of cryptocurrencies and of emerging legal frameworks, but this has spurred a new movement to tokenize the world. The author gives an unbiased, authoritative picture of the current playing field, exploring the token opportunities and provides a unique insight into the developing world of this tokenized economy. This book will nourish hungry minds wanting to grow their knowledge in this fascinating area.
Table of Contents (18 chapters)
Tokenomics
Contributors
Preface
Index

Hard cap, soft cap, and no cap


Another aspect of the token mechanics was to decide on the soft cap and the hard cap. Some even had no cap at all! These caps are effectively fundraising goals.

Uncapped ICOs

An uncapped ICO is where there is no upper limit to the amount being raised. What the company is effectively saying is that no matter what the demand is, tokens will be created to cater for it. The Ethereum ICO was uncapped and sold approximately 60 million ETH.

Ethereum

What was interesting about the Ethereum ICO was that over the 62 days that it ran for, the price of bitcoin dropped from about $618 USD to $398 USD. This is a 36% drop in value. This meant that those who invested at the very last minute, ended up paying about the same rate of $0.33/ETH as those that invested early.

This highlights two important points. Firstly, the volatile nature of the cryptocurrencies being collected in an ICO can play havoc with the expected calculations and secondly, the duration of the ICO plays a part...