Tokenomics Flashcards
What is the Market Cap and Fully Diluted Market Cap for cryptocurrency? How do you find this information?
The Fully Diluted Market Cap aims to find the theoretical value of a crypto if ALL coins, including those not in circulation, were available.
—–
Market Cap = Crypto Market Price x Circulating Supply
—–
Fully Diluted Market Cap = Crypto Market Price x Max Supply
What is a situation where the Fully Diluted Market Cap would be useless or a situation where it would be the same as the Market Cap?
If a coin had a circulating supply of 1,000,000 coins but a max supply of 2,500,000 coins the difference of which had yet to be minted/released. The Diluted Market Cap would be useful as the gradual release of the coins could cause inflation.
When reffering to cryptocurrencies or token contracts, what is the “circulating supply”?
The circulating supply refers to all coins/tokens in circulation. In other words, all coins mined, created, circulating to users, investors, and traders.
What are Tokens?
Tokens are created as a part of a platform built off of an existing blockchain. They represent a discrete unit of value that in some way have value, or use in some purpose.
What is signaling theory, and how does it relate to cryptocurrency?
Signaling theory refers to behaviour whose primary purpose is it convey something of importance about ourselves whether or not true. Like owning an expensive NFT to signal wealth, etc.
Why might it be important to know why someone is engaging in signaling theory
When you understand some people in your network are trying to signal status/financial wealth, you start to understand what they might do in a given set of circumstances.
What is hedonic value?
Hedonic value represents the entertainment/emotional value resulting from the fun/play of an experience, instead of the achivement of any pre-defined goal.
What could be some examples of hedonic value?
Enjoying a game with a good friend. Being gifted a special in game item on your birthday, etc.
