Tokenomics

We help engineer profitable and secure tokenomics and game economy for your web3 protocols.

About Tokenomics

What?

Tokenomics is a combination of "token" and "economics." It is the study of all the factors that contribute to the value of a cryptocurrency, including its maximum token supply, how new tokens are added to or removed from circulation, incentives for token holders, and the project's utility.

about

We provide a full-service tokenomics review, its design including token architecture based on business requirements, threat modeling along with ecosystem roles and controls.

WHY?

It is highly cardinal for the financial engineers to build a persistent tokenomics and financial model for the Defi protocols that are secured, scalable and profitable. With massive progress in the blockchain realm, there will always be a battle between financial models and use-case implementations. Assessing those risks beforehand can help your protocol to discover loopholes in your structure and amend them accordingly.

Process

  • 01 - Reconnaissance

    The financial auditors gather around to discuss and analyze the provided project document to validate the idea behind it. Then they swiftly move towards examining the financial model, incentivize, and disincentive mechanism along with the trigger indicators.

  • 02 -Design

    This phase starts with the identification of the methodologies and the goals of the token including its growth drivers and token holding incentives. Identification of the workflow is also explored to assign weight to factors in the incentive model which prioritize the network growth.

  • 03 - Execution

    This phase starts with the mechanism design where the auditors identify the agents of the system and their possible interaction with each other along with their attributes and behaviors. Moving forward models are executed but are not limited to economical, mathematical, and game theory design.

  • 04 - Clouser:

    The final stage includes monitoring and testing such as the financial model dynamicity test, marginal case analysis along with stress test. All the findings are then summarized in a document to be submitted as a final report to the client.

Tokenomics Services

mechanism design

Mechanism Design

Mechanism design affects the long-term sustainability of decentralized token ecosystems. Keeping that in mind BlockApex provides aligned incentives and various mechanism designs.

agent based modeling

Agent Based Modeling

To implement a fool-proof agent based model, BlockApex looks closely into agents’ attributes, interactions, and behavior of agents and designs the model.

financial risk assessment

Financial Risk Assessment

There are plenty of risks in Defi, including those which are not regulated yet. Assessing them beforehand would help identify the preventable loopholes along with their mitigation.

token economy design

Token economy Design

Being a purely digital money that aims to facilitate on a global level, the token economy design by BlockApex ensures that it functions as intended to.

Tokenomics Reports

 Lightlink Bridge: BlockApex WhiteBox Code Review Report

the source code review of Lightlink Bridge Validator and Keeper. The purpose of the assessment was to perform the whitebox testing of the Bridge’s validator and Keeper before going into production and identify potential threats and vulnerabilities.

BlockApex
October 6, 2023
BonqDAO - February 3, 2023

The BonqDAO security breach that occurred on February 2, 2023, had far-reaching consequences for the platform, its users, and the wider DeFi ecosystem. The attack exploited a vulnerability in the integration of the Tellor Oracle system, which BonqDAO relied on for obtaining token price information.

BlockApex
September 22, 2023
Orion Protocol - February 4, 2023

The attackers exploited a reentrancy vulnerability in the Orion Protocol's core contract, ExchangeWithOrionPool, by constructing a fake token (ATK) with self-destruct capability that led to the transfer() function.

BlockApex
September 11, 2023

FAQs

1. Which framework is used to design tokenomics model?

The disruptive potential lies in expanding the concept of value that can be partitioned and traded beyond purely economic terms, including reputation, work, copyright, utility, and voting rights. Once tokenized, all these manifestations of value can be detected, accounted for, and leveraged in the context of a system of incentives that may promote fair levels of wealth and power distribution. The following tools are used to design a tokenomics model:-

  • Mathematical Modeling
  • Financial Modeling
  • Game Theoretic Modeling
  • Agent-Based Modeling
  • Empirical proof Mechanism
  • Probability Theory
2. What are the parameters of economic model design?
Ans-There are two broad classes of economic models—theoretical and empirical. Theoretical models are a type of economic behavior that seek to derive verifiable implications about economic behavior under the assumption that agents maximize specific objectives subject to constraints that are well defined in the model. They provide qualitative answers to specific questions—such as implications of asymmetric information or how best to handle market failures. Empirical models aim to verify the qualitative predictions of theoretical models and convert these predictions to precise, numerical outcomes. Parameters of Economic Model
  • Token Utility
  • Growth Drivers
  • Demand Drivers
  • Token Distribution
  • Inflationary / deflationary Model
  • Incentive / Disincentive Mechanism
3. What are the features of financial risk assessment?
Ans-Features of financial risk assessments are:
  • Prepares you for the unexpected.
  • Forecast potential problems.
  • Maintain competitiveness.
  • Failsafe mechanisms and triggering indicators
  • “Ins” and “Outs” of the system
  • Alignment of rewards with network adoption
  • Stress testing and marginal case analysis
  • Circulating supply and unlock schedules
4. What are the deliverables of tokenomics design?
Ans- Deliverables of tokenomics design are:
  • Idea Validation
  • Mechanism Design
  • Workflow
  • Design Goals
  • Economic Model
  • Business Model

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