Tokenomics with Vladimir Menaskop, part three—the finale: “Tokenomics isn’t needed”

ForkLog concludes a wide-ranging series on tokenomics by Web3 researcher Vladimir Menaskop. In earlier instalments readers learned about methods of initial token distribution, go-to-market strategies, effective no-code work and much else.  

This final primer sums up the lessons and dissects telling examples of how the tokenomics of different projects determined the success of some and the failure of others.  

From the author

In 2016 we launched DAO Synergis—among the first decentralised autonomous organisations. Our goal was to help others enter the worlds of Web 3.0 and Web3. Today there are simple tools and accessible grants; back then there was nothing at all. 

Methods and approaches have changed over time, but a persistent trend has remained—what I would call “crypto-nihilism”. Its adherents claim that “tokenomics isn’t needed”. At the other extreme sits “crypto-positivism”, a faith that “tokenomics solves everything”. Both are far from reality. 

So, in this concluding part I set out to puncture both myths with concrete examples. Tokenomics is the most important—and the most criticised—element of Web3 start-ups. 

From general to specific

This section considers the latest research on project tokenomics and balances it with practice. We also briefly examine the memecoin market—central to the myth that tokenomics is “unnecessary”. 

Tokenomics basics

Below are findings from a report by the Fjord launchpad. Its authors list what matters most for any crypto business:

1. Product–market fit. 
2. Valuation and capital raising.
3. How to make people care about the project.
4. Tokenomics.
5. Clarity of communication. 

Note that tokenomics is singled out. Moreover, there is a clear instruction: 

“One proven way to create persistent buy pressure is buybacks funded by revenue. If you cannot afford buybacks in the first 6–12 months, be honest: set clear KPIs and explain when and how they will start.” 

Keep those points in mind and turn to another important study. 

Why do crypto projects choose buybacks?

That is the question posed by Coinspot, answered as follows: 

“The repurchase of tokens indicates stable income. This is especially effective for profitable protocols such as Aave, which reinvest part of their revenue in token buybacks. Unlike projects that stimulate liquidity with token giveaways (which leads to inflation), buybacks burn supply, creating long-term price support.” 

Record that, then move up a level to a Messari report. It states:

1. Buybacks have no direct relation to price action, which is driven by revenue growth and narrative formation. My note: not quite. Direct repurchases and burns do affect price; there is simply no fixed, necessary correlation. Buybacks must be tied to other tokenomics elements: when abstracted from cash flow reality, they fail in purpose and only worsen a project’s already weak position.  
2. When revenues are high and price peaks, a project ends up spending more cash reserves to buy tokens at unfavourable prices. Again, not necessarily: no one is forced to buy immediately—set up a reserve fund instead. And yes, a reserve fund is a simple, elegant and accessible, though not the only, solution. 
3. When price and revenues fall and a project needs money to invest in innovation and restructuring, it lacks excess capital to do so. Effectively the project “sits” on large unrealised losses. This does happen, but because teams misunderstand buybacks and timing. Reserving—also via conservative DeFi mechanics—solves such problems. 

In short: teams often judge buyback capacity on the basis of current profits (hype and peak popularity). If the product/chain/protocol later stops earning and buybacks slow, nothing will help. We return to building a good product with durable demand. Buybacks are a bonus, not the foundation of tokenomics. 

Indeed: buybacks are a fine tool for price—and even value—management, but they are not the bedrock. Nor is this the only example. 

Top 100 and top 300: where are they now? 

Having reviewed projects launched between 2013 and 2023, I reached these conclusions:

1. Startups that simply copy (or copied) well-known products mostly disappear, even with ample development capital. There are countless examples—from Ethereum-era memecoins and Bitcoin forks (barely a dozen remain active) to Solana memecoins (survival below 5%). And it is not only about “dead” tokens and coins. 
2. For many projects, tokenomics became the stumbling block that dragged otherwise decent services to crypto’s bottom. Few bothered with it; most assumed it was a pretty pie chart and, at best, a couple of explaining sentences. It is not. 

Why has the market soured so much on tokenomics? I will answer that later. For now, keep these two points in your notebook. 

Token unlocks move markets

Obvious? To me, yes. Many needed years and multiple studies to accept a simple fact. 

The key conclusion is this: 

“Although large unlocks typically exert strong pressure on token prices, the actual impact depends on many factors, including market sentiment, token fundamentals and the presence of a compelling story (for the project).” 

Beneath that lies tokenomics’ primary law: increase demand and reduce supply so interest in your token keeps rising. Derived from the law of supply and demand, it nudges projects either to retain part of supply after the initial distribution or to accumulate tokens over time. 

Both approaches work in their own way and can be combined. 

Yet the notion persists that simply handing all tokens to the community is a boon and the system will “run itself”. In practice, it does not. 

There are many reasons. Two will suffice. First, many airdrop hunters are “community” only until they receive tokens. Second, decentralisation works well where several effective nodes already exist; if the emission centre is singular and is dismantled right after the initial distribution, such centres do not exist and no one coordinates action.

“Tokenomics is shifting toward even emissions”

So read the headline I once saw in the news. Read it this way: the dynamic part of tokenomics—vesting and cliff periods—is a crucial component that cannot be ignored. 

The practice is not new, yet many still think it unnecessary and that the entire token supply can be minted and released at once. Fortunately, some show a different approach: take UNI, to which we will return. 

What might pass for large, popular projects (ETHFI or ONDO) is, for small and mid-sized ones, usually either murder or suicide. This, in turn, explains the poor survival rate of memecoins.

Now change perspective and work backwards. 

From specific to general 

Here we start with projects and their negative experiences, then reframe with theoretical signposts. 

Aragon and Maker: DAO vs DAO

In this case, a rich treasury sparked conflict among DAO participants. 

And the outcome? 

A new version of Aragon and ecosystem growth. That shows tokenomics sometimes needs crisis management. Counterexamples—such as The DAO—snubbed crisis management altogether, outsourcing everything to another DAO (Ethereum). 

It matters less how neatly you set up tokenomics to fund a budget, treasury or multisig. It matters more whether you account for the interests of different groups at a given moment—preserving both strategy and a functioning DAO. 

Zilliqa: a tokenomics rethink

Zilliqa leads in many respects. It was among the first sharded projects and among the first high-throughput chains. It also ran a successful ICO. 

Then came news that the project confirmed a tokenomics review. What lies behind that? 

An illustration of how deeply tokenomics shapes every project. Even with financing, a community and protocol fees you can still lose in a brutal arena now crowded with Solana, Ton, Aptos, SUI and a host of other blockchains and DAG solutions. 

Tokenomics must answer market needs not only now but prospectively. And this is hardly the only case of teams turning away from the market. A few more follow. 

ZK: a botched drop or insider game? 

Everyone wrote that ZK was a fail, not an airdrop. What really happened? 

The story is told not by the drop itself but by the DeFi user rewards programme, grandly titled Ignite. It ended without lasting even a quarter. 

Why? Because the market was in decline. 

That seems logical: do not dilute supply with new tokens, stoking inflation in a bear market. Yet even that was not obvious to the team and advisers, though it should have argued against launching the rewards programme. 

It matters less how much money you have and what you want to do with it, and more whether you can manage it well—tuning cash flow to market conditions and tokenomics principles. ZKsync is far from the only example. 

Scroll: the same problem, side view

If you had tested the network from launch, paid gas and earned only via standard DeFi mechanics—rolling income into new NFT mints for the drop—you would hardly be thrilled to receive the same reward as those who just showed up on a CEX after listing. You earned through work; they earned through time-locked funds—something you also had, just on different platforms. Fair? 

The community simply turned away from Scroll. Post-airdrop, network metrics were so poor they elicited second-hand embarrassment. 

That is a straight tokenomics error: choosing an exchange known as a “project killer” over a live, developed community cost the project two to three years of self-inflicted delay. 

OpenSea and Blur: competition vs community

I have followed this fight from the start; NFT 2.0—programmable assets—is a topic I know well. 

First OpenSea lost to Blur, which found a simple, elegant solution for both NFT trading and lending. Then marketplace Magic Eden outflanked everyone by riding the Bitcoin-NFT and “inscriptions” narrative. After much back-and-forth, OpenSea, oddly enough, listened to the community—and in 2025 reclaimed leadership. 

Many factors shaped this rivalry; two touch tokenomics:

1. OpenSea resisted issuing a token—an error even costlier than refusing to side with the community on creator royalties. 
2. The team then corrected course with community activity in mind. 

What is so hard about doing what many have done many times? It still took OpenSea more than seven years to grasp a basic principle: do not play games with the community—do not follow it blindly, but do reflect clear community demands in tokenomics. 

Even so, if Blur once carved out OpenSea’s share, the team’s second project, Blast, proved far less successful—another reminder that tokenomics is unique to each product, even within the same team. 

Consider that case more closely. 

Blast: lost bearings

After Blur’s collapse (again, virtually the same team), Blast remains one of the biggest puzzles. 

This layer-2 was in the top ten and could have secured a niche (Berachain now seeks it—and to a degree Unichain), yet things turned out otherwise. 

The project made three mistakes no one should repeat:

1. Token functions too abstract. What can BLAST do? It offers neither proper governance nor real utility. 
2. A complex, opaque distribution system. Blast Gold is a lesson in how not to work with developers and the community. 
3. A points system with no feedback—the same problem. 

Yes, as the Japanese proverb goes, “when the ship has sunk everyone knows how it could have been saved”. Still, such approaches should not be repeated under any circumstances. That projects like Blast/Blur use them is a mystery with a straightforward answer: teams believe they can handle everything on their own. 

Something similar happened in crypto legal services in 2011–2017, until the SEC showed contracts and other legal hurdles were not so simple. Tokenomics is undergoing similar convulsions now: not all positive, all unavoidable—and thus the segment evolves so rapidly.

New negative examples keep appearing. Let us end this section on a positive note.

UNI: from airdrop to fees

Uniswap are innovators in DEX. Version one worked without asset whitelists, unlike predecessors; version two enabled swaps of any tokens without direct ETH pairs; version three introduced concentrated liquidity; version four made a “hook” breakthrough. Their tokenomics is sound, too. 

Uniswap not only weathers DAO infighting—with big funds and rank-and-file crypto-enthusiasts alike—but also introduces holder rewards (via fees) for UNI. It began at 0.15% and later rose to 0.25%. According to DeFi Llama, the “tips” add up. 

With a well-designed product, token functions are not only acceptable but extensible. I will not claim it will always be so, but for now UNI and its holders are handling it. 

This is not the only such example. Think of BNB burns and launch participation, DOT’s thoughtful split, DAO payouts at 1inch, and more. 

Time to wrap up and generalise. 

Methods that work

Functions are not just text

We will drink this cup to the dregs in the DePIN segment, where token functions are not just diverse but vast, complex and must be directly linked (or at least correlated) to functions of entities outside the online and on-chain worlds. 

In any case, functions are where you start, not where you finish. 

Buybacks

The simplest, most reliable and effective tool. For it to work, first, the team must not be greedy—now a rarity; second, the project must have revenues. In that sense BNB is a positive example, though there are other questions in different dimensions. 

The core is the community

The vast majority of projects dream of a scheme like this:

1. Sell all rounds to angels, syndicates, funds and other investors.
2. After the TGE, run a pump-and-dump. 
3. Buy back a mountain of tokens at the bottom.  
4. Profit three times: once raising capital; again at TGE; and a third time post-crash. 

In 99% of cases this trick fails; no wonder so many cases in 2024–2025 revolve around market makers.

The advice is simple: slower is better. Copy Uniswap, Ethereum and others—but not Gotbit and similar “crypto-companies” chasing instant gain. 

Compare the approaches of AAVE and Uniswap with CRO or even SOL and you will see: the community will exert its influence—sooner or later, broadly or narrowly—and it will be critical. Especially for those unwilling to listen. 

Tokenomics is not a table

Nor a model, chart or text. What is it, then? First, the native fit of token functions within the protocol, project or app. Second, a blend of forecasting with behavioural patterns across scenarios. Presenting that in a table, model, chart or text is up to the team. 

Which is why tales of altseason, four-year and other cycles are bedtime stories for adults. You can believe them forever; they always work the other way round. 

Conclusion 

Back to where we began. The core empirical law of tokenomics: reduce supply and increase demand—without gimmicks, natively.

Not only does ZKsync’s closure of Ignite prove it (in a bear market, do not stoke inflation—though sometimes it is apt), but so does the HYPE approach of a well-known exchange, where token games led to heavy losses after a multi-day rally following an airdrop. The culprit is the myth that liquidity solves everything. It does not. 

At Synergis we once devised a quick-analysis method we called “4K: team, concept, coin and code”. Note that “coin” (token) is only a quarter. Without interconnection and interaction with the others, it will not live. 

To me, tokenomics today is not a table of funding rounds, category percentages, vesting and cliffs. Rather, it is:

1. A formal, simple lite/white paper showing how well the team understands and accepts its own tokenomics. 
2. Marketing, development and community roadmaps stitched together with the tokenomics roadmap. 
3. A described process for building a DAO and handing it mechanisms to influence the token. 
4. Token functions and their possible evolution. 

I hope readers of this series form a similar view, so we can grow the industry rather than kill it by putting everything on zero yet again. 

Thank you for reading—for now, goodbye.