The term “tokenomics” combines “token” and “economics”. It is an essential part of the fundamental research that goes into developing any crypto asset.
Before purchasing a cryptocurrency, it is crucial to research its tokenomics due to the volatility and risk involved in the market. The tokenomics of a cryptocurrency can help you determine whether it’s a good investment.
So, let’s explore the details of what tokenomics is, the tokenomics of Biswap and why it’s important.
Key Aspects of Tokenomics
Before we go deeper into the details and technical information, let’s figure out the definition of this term.
In simple words, tokenomics is how the user can understand the cryptocurrency’s supply and demand characteristics. It is also essential for understanding the future value of a particular crypto asset.
Tokenomics' main components that we will review in the article:
To make it easier for you to understand, we’ll define these terms and take Biswap as an example.
Tokenomics of the Biswap Native Token
Following the results of the community voting that took place between 2023.01.13 and 2023.01.16, the current distribution of BSW tokens per block was set to 15.
BSW supports the platform and facilitates its activities. It powers Biswap’s incentivization model and functions as a reward for network participation.
The start supply of BSW was 10 000 000 tokens. Those tokens were allocated for initial liquidity, marketing, and strategic partnership purposes.
💡Research about BSW token here: https://biswap.org/bsw_token
Distribution of BSW
As of January 19, 2023
The allocation of 600 million BSW tokens is as follows:
✅ Farms / Launchpools: 80.7% per block
✅ Referral Program: 4.3% per block
✅ SAFU: 1% per block
✅ Team: 9% per block
✅ Investment Fund: 5% per block
Biswap also allocates 100 million BSW tokens for:
- 70 million: NFT (Earn), GameFi (Play to Earn), and Strategic Partnerships
- 30 million: Transaction Fee Mining
What is a Transaction Fee?
The Biswap team allocated 30 million tokens for the trans-fee mining, but those tokens would be generated uniquely. It should be noted that trans-fee mining tokens are generated only when a user withdraws funds from the “Fee Return’’ balance. As soon as the trans-fee mining mechanism reaches 30 million tokens, it will be automatically disabled.
As a result of the recent community voting that took place between August 5–8, 2022, the Trade Fee increased from 0.1% to 0.2% and has to be distributed as follows:
💎 0.15% — LP Reward for Liquidity Providers
💎 0.01% — BSW Token Burn
💎 0.02% — Biswap Earn (Multi-reward Pool, Double Launchpools, other product features)
💎 0.02% — Biswap Team
Learn more about trading fee increases and distribution:
What is a Maximum Supply?
Cryptocurrencies and tokens built on a blockchain have set up, algorithmically created release schedules. This means that we can accurately predict how many coins will be made by a specific time.
Max supply is a number of coins or tokens that will be ever produced. As soon as the maximum supply is reached, there will be no more of these coins or tokens minted.
📍The maximum supply of BSW tokens is 700 000 000.
What is a Total Supply?
Total supply is the number of tokens/coins that exist now. They can be in circulation or somehow locked.
The formula for calculating is quite simple 🔽
The sum of tokens/coins that were already mined (or issued) minus the total of coins that were burned or destroyed = the total supply
Let’s imagine we opened the company and produced 10 vases in 1 week. That is the supply of production.
Then, suddenly, we noticed 1 cracked vase and sent it for recycling. In the crypto world, we’d say that vase was “burned”.
The total supply of vases is 10 vases minus 1 cracked vase = 9 vases.
📍As of January 19, 2023, the total supply of BSW is 434 806 238.
What is a Circulating Supply?
Circulating supply is a number of tokens/coins that are publicly available and circulating in the market. It is possible for a cryptocurrency circulating supply to increase or decrease over time.
The formula for calculating 🔽
Total supply minus all the blocked tokens = circulating supply
Going back to our 9 vases. As they are rare and unique, we won’t sell them all at once. We’ll put 2 vases in storage. So, those 2 vases are “locked”.
The circulating supply of vases is 9 vases (total supply) minus 2 “locked vases” = 7 vases.
📍As of January 19, 2023, the circulating supply of BSW is 373 165 069.
By the way, a cryptocurrency’s market capitalization can be calculated using its circulating supply.
What is Market Capitalization?
Market Capitalization (or Market Cap) in the blockchain industry refers to a measure of cryptocurrency market size or, in other words, the value of the crypto asset.
The formula for calculating 🔽
The calculating supply x the price of the crypto asset = market cap
So, let’s pretend that one vase costs $2. The calculating supply of our vases is 7.
The market cap of vases is: 7 x 2 = $14.
📍As of January 19, 2023, the market cap of BSW is $69 057 345.
Use the CoinMarketCap website to track and analyze BSW conditions on the market:
What is Cryptocurrency Burning?
It is the process of the permanent destruction of tokens/coins. In other words, it means removing coins from circulation, thereby reducing the total supply. Tokens are usually transferred to a burn address during this process.
The tokens/coins get burned for two main reasons:
- To increase their value
- To keep their condition steady
BSW Tokens Burn
Biswap DEX has its own Deflationary Mechanisms. Our platform always develops and aims to enhance them. The token burning normally occurs once a month.
The BSW burn happens to keep the token valuable and less volatile.
As of January 19, 2023, Biswap has already burned 42 114 754 BSW (~ $7 833 344).
The metrics used for token burning are:
🔥All the rewards from accounts with no referrer
🔥BSW Auto Compound performance fee
🔥Biswap Holder pool early-withdrawal fee
🔥Auto Compound pool early-withdrawal fee
🔥5% of the trading fees that are used for repurchasing the BSW tokens from the market
🔥50% of the 1% Marketplace commission fee that is used for the purchase of BSW
🔥15% from IDOs revenue
🔥10% of BSW from NFT Sales Revenue
🔥0.5% Royalty Fee from each sale of Biswap Robbies NFT Earn Collection
Find other important information about token burn here:
Tokenomics is like a skeleton of the platform. You can understand if the coin/token is worth investing in by analyzing its tokenomics key aspects.
Biswap takes steps to be trustworthy. It’s shown by our tokenomics and the variety of our deflationary mechanisms. The project keeps developing to please existing Biswappers and attract more newcomers.
Don’t hesitate to earn on Biswap! Make a killing with BSW!
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