Unlocking the Future: Navigating Token Economics with the Cenit Simulation Tool
Carlos Bort, Co-founder and CEO of Cenit.Finance, one of the leading companies in the tokenomics space talks about their objectives, their innovative tokenomics simulator and learning more about how they see the tokenomics industry.
Can you explain the process of defining a token economy using the Cenit simulation tool?
C: Certainly! Setting up a token economy with the Cenit simulation tool is straightforward and involves five key steps:
1. The general information of your business/protocol
2. Token allocations for investors
3. Value proposition of your project, growth rates, and token utility for that value proposition
4. Incentivization of your token
5. User Behavior hypotheses
You have the option to configure your token economy using either a form template or an Excel spreadsheet for the most custom or complex token economies. Once your economy is defined, we convert the information into Python code to run agent-based simulations.
While we could detail into the specifics, we've prepared a comprehensive guide that covers everything you need to know: https://www.cenit.finance/blog/tokenomics-calculator
How does the simulation tool help analyze different hypotheses related to user demand and staker expectations?
C: Our simulation tool assists projects in evaluating various scenarios by initially incorporating all conceivable hypotheses into the simulation. It then allows users to adjust the simulation parameters according to their preferences.
Once the parameters of the economy have been adjusted, this is then translated into token organic buying demand.
To illustrate the power of this tool more vividly, as the saying goes, "a picture is worth a thousand words," you can check a live demonstration at https://gamefi-demo.cenit.finance/
How does the tool handle validation, and what corrections can it suggest during the setup process?
C: A lot. Our tool is designed to offer extensive validation for any token economy you plan to establish before launching your token. It enables projects to determine necessary growth rates to prevent their token from dumping, identify if their incentives are too much, or recognize if their vesting schedules are too aggressive.
The objective is to prepare you comprehensively for all possible scenarios before your token goes live, ensuring you're well-informed and ready to adjust your strategy as needed.
What advantages does using a Google Sheets spreadsheet template offer in defining token mechanics, graphs, and metrics?
C: Cenit's templates product offers two significant benefits: 1) It empowers users with the flexibility to design any desired economy, including the dynamics between agents, growth, and token flows; and 2) It matches the industry's standard practices, facilitating an easy transition for those accustomed to using Tokenomics spreadsheets.
Our key advantage lies in our ability to convert the logic defined in a spreadsheet directly into Python code. This conversion allows for the visualization of various graphs and metrics, providing a clear view of the token mechanics in action, using agent-based simulations.
In the DEX model, how does the fee distribution work among AMM Liquidity Providers, stakers of the protocol token, and the Treasury?
C: In the Decentralized Exchange (DEX) model, you have the flexibility to set up the fee distribution according to your preferences. The fee distribution impacts the Annual Percentage Yield (APY) for Liquidity Providers (LPs) and stakers, driving token demand, as well as the protocol's revenue.
Being able to experiment with various fee distribution strategies is crucial. It helps determine whether the incentives are sufficient and appealing enough for participants, among other factors.
What parameters are examined when building scenarios in tokenomics, especially regarding staking demand, burning mechanism, and agent selling behaviors?
C: In constructing scenarios within tokenomics, we categorize simulation parameters into two main groups:
1. Design Parameters: These are the elements that you can control in your protocol. This includes fee percentages, vesting schedules, initial token generation event (TGE) price, and the various utilities within the economy.
2. Hypotheses: These are the elements that you cannot control in your protocol. Examples include user growth, holding patterns, user spending, and the expected annual percentage yield (APY) for stakers, among others.
Our simulation platform allows you to explore both sets of parameters to understand their potential impact on your economic model.
What are the aspirations regarding the global reach and adoption of the Cenit simulation tool, and are there strategies in place to expand its user base globally?
C: Our goal is for the Cenit simulation tool to become the benchmark for tokenomics simulations worldwide. At present, many rely on basic/non-standard Excel spreadsheets for allocations, which fail to accurately predict the future demand of tokens.
Looking to the future, we aim to establish Cenit as the go-to platform for the upcoming generation of internet-native companies designing their economies.
Are there plans to introduce additional features or capabilities to the simulation tool in the future?
C: Absolutely, we are constantly looking to enhance our simulation tool with new features and capabilities. We are working on two defined lines:
1) Evolving our simulation product, we are about to launch a new version of our tokenomics simulator, something that the industry has never seen before. A suite packed with an array of tokenomics examples, innovative ways to visualize your tokenomics, ways to share your tokenomics with potential investors or your community, and much more.
2) Creating new products, we've recently introduced a product aimed at continuous monitoring for projects that are already live, which you can explore here: https://www.cenit.finance/tokenomics-continuous-monitoring.
Our goal is to enable users to use their protocol's current status in conjunction with our simulation platform for precise projections. This will help you understand how various modifications to your design or growth strategies could impact your overall economy.