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3. Tokenomics and the link to value

Separate product success from token rights

A useful product can exist without compulsory demand for its own token. Determine the token's current function: payment, collateral, access, governance participation or another right. Then identify the mechanism connecting usage with the token. The word “utility” alone is insufficient. A promised future function and a currently working function carry different evidential weight.

Protocol fees, protocol revenue and token-holder income are different quantities. Payments may go to validators, liquidity providers, a company or a treasury. Check the recipient, distribution terms, ability to change the rules and legal basis. TVL measures a particular quantity of locked assets; it does not establish net profit or cash flow to the token.

Examine supply and control

Find allocations to the team, investors, community and other recipients. Read the vesting schedule: dates, conditions, cliffs and gradual releases. A scheduled unlock does not mean every unlocked token will immediately be sold, but it can change available supply and participants' incentives. Compare the event with current circulation and market liquidity; do not present that comparison as a precise price forecast.

Check who can modify the contract, issue tokens, pause operations or control the treasury. Address concentration requires interpretation: an exchange address may represent many clients, while connected wallets may belong to one owner. An audit helps identify the reviewed code, date and findings. It does not guarantee the absence of future vulnerabilities.

Map the mechanism

Write a short chain: a user performs an action → a payment or need arises → someone receives value → the token has a defined role. Identify its weakest link and a source that could test it. If the link relies entirely on possible future popularity, label it as an assumption.

Practice: describe one functioning mechanism and one unverified promise for your chosen project. Separately record the next important supply change and the condition under which it would matter to your research hypothesis. Do not turn a tentative explanation into a proven entitlement.