Token economics decides who can sell, when, into how much liquidity, and why anyone would want to buy. For a funded project, the launch valuation and the unlock calendar matter more than the narrative. In Memento Research’s review of 118 token launches in 2025, those that opened at $500M–$940M in fully diluted value fell by a median 82%, against 26% for those that opened at $25M–$200M, as reported by Briefs Finance.
This page is the reference we would hand a foundation council, a CFO or an investor before they sign off a model. It sets out the five questions a model must answer, the market evidence on each, and where models tend to break.
Who decides this
The foundation council owns the token model, and the CFO owns the numbers behind it. The council is accountable for the allocation, the promises made to holders and the governance the token carries. The CFO is accountable for treasury runway, market-maker and exchange commitments, and the reconciliation between the published model and what is deployed. Investors do not own the model, but they should test it as hard as either, because their returns depend on the same calendar.
What does a token economics model have to answer?
A complete model answers five questions: how much supply exists, who holds it, when it becomes liquid, why anyone buys it, and who can change the rules. In our experience, published models answer the first two well and the last three badly.
| Question | What the model must show | Evidence an investor should ask for | Typical weakness |
|---|---|---|---|
| Supply | Maximum supply, emissions and any burn | Emission schedule with a budget owner | Open-ended incentives with no cap or review date |
| Allocation | Each bucket’s share, recipient and purpose | Cap table, signed agreements, wallet list | Buckets with no stated purpose, or totals that do not reconcile |
| Release | Cliffs, durations and monthly unlocks for 36 months | Deployed vesting contracts and addresses | Schedules promised in documents but not enforced on-chain |
| Demand | What the token does and what value flows to it | Fee, staking or governance mechanics as specified | Utility described in words with no mechanism |
| Control | Who can change parameters, and how | Governance process, admin keys, upgrade rights | Insiders hold enough supply to pass any vote |
The rest of this page takes the three hardest questions in turn: float, release and demand.
How much supply should be liquid at launch?
There is no correct float percentage, but the float at launch must be large enough that the listing price reflects real trading. A small float priced at a large fully diluted valuation leaves the market to absorb years of unlocks at a price it never tested.
Binance Research warned about this pattern in May 2024. It described launches with low circulating supply as increasingly common, and called the resulting price growth unsustainable once locked supply reached the market. Citing Token Unlocks and CoinMarketCap data, it estimated that about $155 billion of tokens would unlock between 2024 and 2030.
The 2025 evidence points the same way. Memento’s figures, reported by Briefs, show outcomes worsening as opening valuations rose. Our test is internal consistency rather than a target float. Take the circulating supply at launch, the listing price and the first twelve months of unlocks. Then ask how many new tokens arrive for every token that trades on day one. If the answer is several, the council should know before it lists.
How should allocation and vesting be set?
Allocation should follow purpose, and vesting should follow who is likely to sell. Each bucket needs a reason to exist, a recipient, and a release schedule matched to the risk that recipient poses to the market.
The market has rough norms, though no standard. Streamflow’s May 2026 benchmark, which draws on its own on-chain data and on Tokenomics.com research, describes a 12-month team cliff as the baseline for serious projects. It puts core team vesting at three to four years linear, and investor cliffs at six to twelve months with two to three years of vesting. Treat these as one vendor’s reading of the market, not a rule.
Allocations vary more. Tokenomist, which has proposed a standard set of allocation categories because projects report them so differently, found insider allocations averaging over 51% of supply among liquid staking tokens. Derivatives tokens averaged about 49% to the community. It noted that most derivatives tokens underperformed despite their high community share, and that a high insider share does not by itself mean poor design. What matters is when insider tokens become liquid and whether the market can absorb them.
That is where recipient type matters. Keyrock’s study of more than 16,000 unlock events, as reported by BeInCrypto, found about 90% put negative pressure on price. Team unlocks were the most damaging category, with average drops of up to 25%. Ecosystem development unlocks were the only category with a positive average, of about 1.18%. The lesson for the council is not that team allocations should be small. It is that team cliffs should not land in the same month as investor cliffs, and that each large unlock needs a treasury and communications plan.
Release schedules should be enforced by contract, not by promise. A schedule held in a token vesting contract can be checked by any investor or exchange. A schedule held in a spreadsheet can only be trusted.
What creates demand for the token?
Demand comes from a mechanism, not a description: the token must be required for something, earn something, or govern something that users value. A model that cannot name the mechanism has supply and no demand.
Three mechanisms recur. A token can be needed to use the network, as with gas. A token can receive a share of protocol revenue, directly or through buybacks and burns. Or it can control decisions with economic weight, such as fee levels or treasury spending. Some designs combine two or more.
A recent example of a project changing its demand mechanism is Uniswap. In December 2025 its governance approved a proposal, with 99.9% of votes in favour, to direct part of trading fees to the protocol and use it to buy and burn UNI. The same proposal set a one-time burn of 100 million UNI. Whatever one thinks of the design, it shows the point: a governance token without a value mechanism can be given one later, but only through a vote and at the cost of years without it.
What should an investor check beyond the token paper?
An investor should check the agreements that create supply outside the published allocation, especially market-maker loans and exchange commitments. These can be agreed late, by the CFO, and never reach the council as supply decisions.
Under the loan-and-option structure, which Tokenomist calls the most common in crypto market making, the project lends tokens to a market maker, which may later buy them at agreed strike prices. Tokenomist’s guide to loan-and-call-option terms notes that the market maker’s largest return often comes from the option rather than from quoting quality. It recommends a ladder of strikes, option coverage well below the full loan, a term matched to the liquidity need and measurable spread, depth and uptime obligations.
Our rule is simple. Every loaned token belongs in the published allocation and in the circulating supply figure. If it is not there, the float the project publishes is wrong. Disclosure obligations for token sales differ by jurisdiction, and that review sits with counsel.
What goes wrong: tokenomics the contractor rewrote
The council approves a model, and a contractor deploys a different one. The changes are small and made in good faith under deadline. A cliff is entered in days rather than months. One investor’s tokens are released outside the vesting contract because the side letter said so. A market-maker loan leaves the ecosystem wallet without a line in the allocation.
Each change looks minor to the person making it. Together they mean the token that lists is not the token the council approved, and investors who modelled the published calendar are now holding a different asset. The first person to notice may be an on-chain analyst, in public.
The defence is a reconciliation step with authority. Someone independent of the contractor compares the deployed parameters with the approved model on testnet, before launch, and can stop the launch if they differ. Our guide to the pre-TGE design review, linked below, sets out that check row by row.
How Alcyone approaches it
Alcyone treats the token model as something to be built and verified, not only designed. Token design, vesting structures and fundraising strategy sit together within Alcyone’s fundraising and tokenomics advisory, so the model the council approves is the one the raise and the contracts assume. Its partners built and operate Team Finance, which reports more than 40,000 projects on the platform, though clients are under no obligation to use it. In one published case, a first token launch on a major Layer-1 left about $10M locked in vesting from that launch.