L05: Token Economics
Analyze token supply models, compare market capitalizations, explore stablecoin dynamics, and track Bitcoin halving cycles.
Guided Activities
- Go to coingecko.com.
- Search for "Ethereum" and find: market cap, fully diluted valuation (FDV), circulating supply, and total supply.
- Now search for "Dogecoin." Compare: does Dogecoin have a maximum supply? What about its inflation rate?
- Search for "Bitcoin." What is the maximum supply (21 million)? How much is left to be mined?
- Compare all three: which has the most predictable supply schedule?
Reflection question: How does a limited supply (like Bitcoin's 21M cap) versus an unlimited supply (like Dogecoin) affect long-term price dynamics?
- Go to etherscan.io/tokens.
- Note the top 10 tokens ranked by market capitalization.
- Click on USDT (Tether) — find: total supply, number of unique holders, number of transfers in 24h.
- Click on UNI (Uniswap governance token) — compare the number of holders to USDT.
- Notice: USDT has far more holders because it is used as a medium of exchange, while UNI is primarily held for governance.
Reflection question: Why do stablecoins typically have more holders than governance tokens? What does this tell us about token utility?
- Go to defillama.com/stablecoins.
- Note the total stablecoin market cap and which stablecoin dominates (USDT).
- Click on the "Chains" tab — which blockchain hosts the most stablecoin value?
- Calculate the market share: USDT vs USDC vs DAI. How concentrated is the stablecoin market?
- Look at the historical chart — can you spot the UST/LUNA collapse in May 2022?
Reflection question: Why are there multiple competing stablecoins if they all target the same $1.00 peg? What differentiates them?
- Go to mempool.space and look at the current block height (shown on the homepage).
- Bitcoin halves every 210,000 blocks. Calculate: when was the last halving? When is the next one?
- Go to coinmarketcap.com and look at Bitcoin's all-time price chart.
- Mentally mark the halving dates: 2012, 2016, 2020, 2024. Is there a price pattern?
- The current block reward is 3.125 BTC (after the April 2024 halving). What will it be after the next halving?
Reflection question: Is there a correlation between Bitcoin halving events and bull markets? What economic theory explains this?