[{"data":1,"prerenderedAt":2427},["ShallowReactive",2],{"blog-token-utility-value-accrual":3,"related-token-utility-value-accrual":708},{"_path":4,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"title":8,"description":9,"date":10,"author":11,"category":12,"tags":13,"keywords":18,"image":23,"readTime":24,"body":25,"_type":702,"_id":703,"_source":704,"_file":705,"_stem":706,"_extension":707},"/blog/token-utility-value-accrual","blog",false,"","Token Utility and Value Accrual: How to Design a Token People Need to Hold","Token utility vs value accrual explained for founders: the main accrual mechanisms, their trade-offs and a decision framework for picking the right design for your token.","2026-10-14","Fibonacci Capital","Tokenomics",[14,15,16,17],"tokenomics","token utility","value accrual","token design",[15,19,20,21,22],"token value accrual","value accrual mechanisms","how to design token utility","token utility examples","/assets/images/blog/token-utility-value-accrual.jpg","10 min read",{"type":26,"children":27,"toc":679},"root",[28,36,41,48,53,89,94,99,105,124,131,136,142,147,153,158,164,169,175,180,186,200,206,211,410,415,457,463,469,474,480,485,491,504,510,515,521,526,607,613,656,662,667],{"type":29,"tag":30,"props":31,"children":32},"element","p",{},[33],{"type":34,"value":35},"text","Token utility is what a token lets you do; value accrual is whether the success of the protocol actually flows back to people who hold the token. The two are often confused, and that confusion is behind many tokens that have plenty of \"utility\" on paper but no lasting demand. A token can be required for governance, staking and fee discounts and still trade down steadily if none of those uses creates a reason to buy and hold it rather than buy, use and sell immediately. Good token design starts by separating three things: the value your protocol creates, the share of that value the protocol captures, and how much of the captured value accrues to the token.",{"type":29,"tag":30,"props":37,"children":38},{},[39],{"type":34,"value":40},"This guide explains the main utility types and accrual mechanisms, where each one breaks, and a framework for choosing the right combination for your project.",{"type":29,"tag":42,"props":43,"children":45},"h2",{"id":44},"value-creation-capture-and-accrual",[46],{"type":34,"value":47},"Value Creation, Capture and Accrual",{"type":29,"tag":30,"props":49,"children":50},{},[51],{"type":34,"value":52},"It helps to think of value moving through three layers:",{"type":29,"tag":54,"props":55,"children":56},"ol",{},[57,69,79],{"type":29,"tag":58,"props":59,"children":60},"li",{},[61,67],{"type":29,"tag":62,"props":63,"children":64},"strong",{},[65],{"type":34,"value":66},"Value creation.",{"type":34,"value":68}," The product does something people want: it settles trades, lends capital, stores data, runs a game. This is measured in usage, not in token price.",{"type":29,"tag":58,"props":70,"children":71},{},[72,77],{"type":29,"tag":62,"props":73,"children":74},{},[75],{"type":34,"value":76},"Value capture.",{"type":34,"value":78}," The protocol takes a share of that activity, usually through fees, spreads or charges for access.",{"type":29,"tag":58,"props":80,"children":81},{},[82,87],{"type":29,"tag":62,"props":83,"children":84},{},[85],{"type":34,"value":86},"Value accrual.",{"type":34,"value":88}," Some of what the protocol captures reaches token holders, directly or indirectly.",{"type":29,"tag":30,"props":90,"children":91},{},[92],{"type":34,"value":93},"Most token design mistakes happen at the boundaries. A protocol can create a lot of value and capture almost none because fees are set at zero to grow. It can capture value but route all of it to a foundation treasury, so the token sees nothing. Or the token can receive value only through a mechanism that holders do not trust, such as a discretionary buyback that may never happen.",{"type":29,"tag":30,"props":95,"children":96},{},[97],{"type":34,"value":98},"Being honest about which layer is weak is the first step to fixing it.",{"type":29,"tag":42,"props":100,"children":102},{"id":101},"the-main-types-of-token-utility",[103],{"type":34,"value":104},"The Main Types of Token Utility",{"type":29,"tag":30,"props":106,"children":107},{},[108,110,115,117,122],{"type":34,"value":109},"Utility is a set of reasons to need the token. The useful question for each is whether it creates ",{"type":29,"tag":62,"props":111,"children":112},{},[113],{"type":34,"value":114},"holding demand",{"type":34,"value":116}," (people keep tokens) or only ",{"type":29,"tag":62,"props":118,"children":119},{},[120],{"type":34,"value":121},"transactional demand",{"type":34,"value":123}," (people touch the token briefly).",{"type":29,"tag":125,"props":126,"children":128},"h3",{"id":127},"medium-of-exchange-or-payment",[129],{"type":34,"value":130},"Medium of exchange or payment",{"type":29,"tag":30,"props":132,"children":133},{},[134],{"type":34,"value":135},"Users pay for the service in the token. This creates transactional demand, but if users buy the token just before paying and the recipient sells it right after, the net effect on holding demand is small. Velocity is high, and high velocity tends to limit how much value a token can hold.",{"type":29,"tag":125,"props":137,"children":139},{"id":138},"access-and-gating",[140],{"type":34,"value":141},"Access and gating",{"type":29,"tag":30,"props":143,"children":144},{},[145],{"type":34,"value":146},"Holding or staking a minimum amount unlocks features, tiers or allocations. This creates holding demand as long as the access is genuinely valuable. It fails when the gated features are not worth much or can be obtained some other way.",{"type":29,"tag":125,"props":148,"children":150},{"id":149},"staking-for-security-or-service-provision",[151],{"type":34,"value":152},"Staking for security or service provision",{"type":29,"tag":30,"props":154,"children":155},{},[156],{"type":34,"value":157},"Validators, node operators, keepers or sequencers stake the token as collateral that can be slashed. This is one of the strongest forms of utility, because stakers are economically committed and the stake scales with the network's needs. It only works if there is real work to secure.",{"type":29,"tag":125,"props":159,"children":161},{"id":160},"governance",[162],{"type":34,"value":163},"Governance",{"type":29,"tag":30,"props":165,"children":166},{},[167],{"type":34,"value":168},"Holders vote on parameters, treasury spending or upgrades. Governance alone is weak utility if decisions have little economic consequence. It becomes stronger when governance controls something valuable: emissions direction, fee switches, treasury allocation or incentive budgets that other protocols want to influence.",{"type":29,"tag":125,"props":170,"children":172},{"id":171},"collateral-and-liquidity",[173],{"type":34,"value":174},"Collateral and liquidity",{"type":29,"tag":30,"props":176,"children":177},{},[178],{"type":34,"value":179},"The token is accepted as collateral or paired in liquidity pools across DeFi. This deepens demand and makes the token more useful, but it also creates liquidation risk during sharp drawdowns, which can amplify volatility.",{"type":29,"tag":125,"props":181,"children":183},{"id":182},"incentives-and-rewards",[184],{"type":34,"value":185},"Incentives and rewards",{"type":29,"tag":30,"props":187,"children":188},{},[189,191,198],{"type":34,"value":190},"The token is used to reward users, liquidity providers or contributors. This is distribution, not demand. Incentive emissions create sell pressure unless recipients have reasons to hold, a point we cover in our guide to ",{"type":29,"tag":192,"props":193,"children":195},"a",{"href":194},"/blog/game-theory-tokenomics",[196],{"type":34,"value":197},"game theory in tokenomics",{"type":34,"value":199},".",{"type":29,"tag":42,"props":201,"children":203},{"id":202},"the-main-value-accrual-mechanisms",[204],{"type":34,"value":205},"The Main Value Accrual Mechanisms",{"type":29,"tag":30,"props":207,"children":208},{},[209],{"type":34,"value":210},"If utility gives people reasons to hold, accrual mechanisms connect protocol revenue to the token. There are a handful of common patterns, each with trade-offs.",{"type":29,"tag":212,"props":213,"children":214},"table",{},[215,244],{"type":29,"tag":216,"props":217,"children":218},"thead",{},[219],{"type":29,"tag":220,"props":221,"children":222},"tr",{},[223,229,234,239],{"type":29,"tag":224,"props":225,"children":226},"th",{},[227],{"type":34,"value":228},"Mechanism",{"type":29,"tag":224,"props":230,"children":231},{},[232],{"type":34,"value":233},"How value reaches holders",{"type":29,"tag":224,"props":235,"children":236},{},[237],{"type":34,"value":238},"Main strengths",{"type":29,"tag":224,"props":240,"children":241},{},[242],{"type":34,"value":243},"Main risks",{"type":29,"tag":245,"props":246,"children":247},"tbody",{},[248,272,295,318,341,364,387],{"type":29,"tag":220,"props":249,"children":250},{},[251,257,262,267],{"type":29,"tag":252,"props":253,"children":254},"td",{},[255],{"type":34,"value":256},"Buyback and burn",{"type":29,"tag":252,"props":258,"children":259},{},[260],{"type":34,"value":261},"Protocol revenue buys tokens on the market and removes them from supply",{"type":29,"tag":252,"props":263,"children":264},{},[265],{"type":34,"value":266},"Simple, visible, no distribution to individual holders",{"type":29,"tag":252,"props":268,"children":269},{},[270],{"type":34,"value":271},"Effect depends on revenue size relative to emissions; poorly executed buybacks can be front-run",{"type":29,"tag":220,"props":273,"children":274},{},[275,280,285,290],{"type":29,"tag":252,"props":276,"children":277},{},[278],{"type":34,"value":279},"Buyback and distribute",{"type":29,"tag":252,"props":281,"children":282},{},[283],{"type":34,"value":284},"Revenue buys tokens that go to stakers",{"type":29,"tag":252,"props":286,"children":287},{},[288],{"type":34,"value":289},"Rewards committed holders",{"type":29,"tag":252,"props":291,"children":292},{},[293],{"type":34,"value":294},"Similar to yield; may raise regulatory questions",{"type":29,"tag":220,"props":296,"children":297},{},[298,303,308,313],{"type":29,"tag":252,"props":299,"children":300},{},[301],{"type":34,"value":302},"Real yield to stakers",{"type":29,"tag":252,"props":304,"children":305},{},[306],{"type":34,"value":307},"A share of fees is paid to stakers, often in a major asset or stablecoin",{"type":29,"tag":252,"props":309,"children":310},{},[311],{"type":34,"value":312},"Clear link between usage and holder return",{"type":29,"tag":252,"props":314,"children":315},{},[316],{"type":34,"value":317},"Can look like a profit share, which raises securities law questions in many jurisdictions",{"type":29,"tag":220,"props":319,"children":320},{},[321,326,331,336],{"type":29,"tag":252,"props":322,"children":323},{},[324],{"type":34,"value":325},"Fee discounts or rebates",{"type":29,"tag":252,"props":327,"children":328},{},[329],{"type":34,"value":330},"Holders or stakers pay less to use the protocol",{"type":29,"tag":252,"props":332,"children":333},{},[334],{"type":34,"value":335},"Rewards actual users",{"type":29,"tag":252,"props":337,"children":338},{},[339],{"type":34,"value":340},"Value is capped by how much users spend on fees",{"type":29,"tag":220,"props":342,"children":343},{},[344,349,354,359],{"type":29,"tag":252,"props":345,"children":346},{},[347],{"type":34,"value":348},"Vote-escrow (locking)",{"type":29,"tag":252,"props":350,"children":351},{},[352],{"type":34,"value":353},"Locking tokens for longer grants more voting power and rewards",{"type":29,"tag":252,"props":355,"children":356},{},[357],{"type":34,"value":358},"Reduces circulating supply, aligns long-term holders",{"type":29,"tag":252,"props":360,"children":361},{},[362],{"type":34,"value":363},"Complexity, and power can concentrate in a few large lockers",{"type":29,"tag":220,"props":365,"children":366},{},[367,372,377,382],{"type":29,"tag":252,"props":368,"children":369},{},[370],{"type":34,"value":371},"Token as required payment or burn on use",{"type":29,"tag":252,"props":373,"children":374},{},[375],{"type":34,"value":376},"Using the service burns or consumes tokens",{"type":29,"tag":252,"props":378,"children":379},{},[380],{"type":34,"value":381},"Ties supply reduction directly to usage",{"type":29,"tag":252,"props":383,"children":384},{},[385],{"type":34,"value":386},"Only works if usage is large relative to issuance",{"type":29,"tag":220,"props":388,"children":389},{},[390,395,400,405],{"type":29,"tag":252,"props":391,"children":392},{},[393],{"type":34,"value":394},"Treasury backing",{"type":29,"tag":252,"props":396,"children":397},{},[398],{"type":34,"value":399},"Treasury assets set a reference value per token",{"type":29,"tag":252,"props":401,"children":402},{},[403],{"type":34,"value":404},"Can provide a floor narrative",{"type":29,"tag":252,"props":406,"children":407},{},[408],{"type":34,"value":409},"Treasury must be credibly managed and transparent",{"type":29,"tag":30,"props":411,"children":412},{},[413],{"type":34,"value":414},"A few practical observations on these:",{"type":29,"tag":416,"props":417,"children":418},"ul",{},[419,437,447],{"type":29,"tag":58,"props":420,"children":421},{},[422,427,429,435],{"type":29,"tag":62,"props":423,"children":424},{},[425],{"type":34,"value":426},"Revenue must exceed dilution to matter.",{"type":34,"value":428}," A buyback that absorbs a fraction of the tokens emitted each month does not offset sell pressure. Compare expected revenue directed to the token with scheduled emissions and unlocks before promising anything. Our guide to ",{"type":29,"tag":192,"props":430,"children":432},{"href":431},"/blog/token-buyback-programs-guide",[433],{"type":34,"value":434},"token buyback programs",{"type":34,"value":436}," covers the execution side.",{"type":29,"tag":58,"props":438,"children":439},{},[440,445],{"type":29,"tag":62,"props":441,"children":442},{},[443],{"type":34,"value":444},"Distribution choices have legal consequences.",{"type":34,"value":446}," Mechanisms that pay holders a share of protocol revenue can change how a token is analysed under securities laws. Take legal advice before turning on a fee switch or real-yield programme.",{"type":29,"tag":58,"props":448,"children":449},{},[450,455],{"type":29,"tag":62,"props":451,"children":452},{},[453],{"type":34,"value":454},"Blends are normal.",{"type":34,"value":456}," Many protocols combine mechanisms, for example sending part of revenue to buybacks, part to stakers and part to the treasury. That is fine as long as the split is published and predictable.",{"type":29,"tag":42,"props":458,"children":460},{"id":459},"where-utility-designs-break",[461],{"type":34,"value":462},"Where Utility Designs Break",{"type":29,"tag":125,"props":464,"children":466},{"id":465},"utility-that-does-not-require-holding",[467],{"type":34,"value":468},"Utility that does not require holding",{"type":29,"tag":30,"props":470,"children":471},{},[472],{"type":34,"value":473},"If users can buy the token, use it and sell within minutes, utility creates volume without holding demand. Ask, for each use case, how long a typical user needs to hold the token.",{"type":29,"tag":125,"props":475,"children":477},{"id":476},"accrual-that-depends-on-discretion",[478],{"type":34,"value":479},"Accrual that depends on discretion",{"type":29,"tag":30,"props":481,"children":482},{},[483],{"type":34,"value":484},"Promises like \"the treasury may buy back tokens\" give the market very little to price. Rules-based programmes (a fixed share of revenue, executed on a schedule) are more credible than discretionary ones.",{"type":29,"tag":125,"props":486,"children":488},{"id":487},"governance-with-nothing-to-govern",[489],{"type":34,"value":490},"Governance with nothing to govern",{"type":29,"tag":30,"props":492,"children":493},{},[494,496,502],{"type":34,"value":495},"A governance token that votes on cosmetic issues is not much different from a token with no utility. Give governance real control over economically meaningful parameters, or do not lean on it as the main reason to hold. Governance also depends on an engaged holder base, which is a community question as much as a tokenomics one; our comparison of ",{"type":29,"tag":192,"props":497,"children":499},{"href":498},"/blog/discord-vs-telegram-crypto-community",[500],{"type":34,"value":501},"Discord vs Telegram for crypto communities",{"type":34,"value":503}," covers where structured governance discussion tends to work best.",{"type":29,"tag":125,"props":505,"children":507},{"id":506},"utility-added-after-launch",[508],{"type":34,"value":509},"Utility added after launch",{"type":29,"tag":30,"props":511,"children":512},{},[513],{"type":34,"value":514},"Teams sometimes launch a token first and promise utility later. The market tends to price what exists, not what is promised. If key utility arrives months after TGE, plan supply, unlocks and liquidity on the assumption that early demand will be speculative.",{"type":29,"tag":42,"props":516,"children":518},{"id":517},"a-decision-framework-for-your-token",[519],{"type":34,"value":520},"A Decision Framework for Your Token",{"type":29,"tag":30,"props":522,"children":523},{},[524],{"type":34,"value":525},"Work through these questions in order:",{"type":29,"tag":54,"props":527,"children":528},{},[529,539,549,559,569,587,597],{"type":29,"tag":58,"props":530,"children":531},{},[532,537],{"type":29,"tag":62,"props":533,"children":534},{},[535],{"type":34,"value":536},"Does the protocol need a token at all?",{"type":34,"value":538}," If the product works equally well without one, a token's value will rest almost entirely on speculation. Be honest here.",{"type":29,"tag":58,"props":540,"children":541},{},[542,547],{"type":29,"tag":62,"props":543,"children":544},{},[545],{"type":34,"value":546},"What does the token secure or coordinate?",{"type":34,"value":548}," If there is real work (validation, sequencing, oracle reporting, insurance backstops), staking-based utility is likely your strongest foundation.",{"type":29,"tag":58,"props":550,"children":551},{},[552,557],{"type":29,"tag":62,"props":553,"children":554},{},[555],{"type":34,"value":556},"Does the protocol capture value today?",{"type":34,"value":558}," If fees are zero or will be for a long time, accrual mechanisms have nothing to distribute yet. Design the mechanism now, but do not market it as live.",{"type":29,"tag":58,"props":560,"children":561},{},[562,567],{"type":29,"tag":62,"props":563,"children":564},{},[565],{"type":34,"value":566},"What is the cleanest route from revenue to holders?",{"type":34,"value":568}," Choose one or two mechanisms you can explain in a sentence. Buyback and burn, fee share to stakers, or burn on use are the most common starting points.",{"type":29,"tag":58,"props":570,"children":571},{},[572,577,579,585],{"type":29,"tag":62,"props":573,"children":574},{},[575],{"type":34,"value":576},"How does accrual compare with dilution?",{"type":34,"value":578}," Model emissions, unlocks and expected accrual side by side for at least the first two years. Our ",{"type":29,"tag":192,"props":580,"children":582},{"href":581},"/blog/tokenomics-design-guide",[583],{"type":34,"value":584},"tokenomics design guide",{"type":34,"value":586}," covers the supply side of that model.",{"type":29,"tag":58,"props":588,"children":589},{},[590,595],{"type":29,"tag":62,"props":591,"children":592},{},[593],{"type":34,"value":594},"What are the legal constraints?",{"type":34,"value":596}," Check the mechanism against the jurisdictions you operate in and the exchanges you plan to list on before you finalise it.",{"type":29,"tag":58,"props":598,"children":599},{},[600,605],{"type":29,"tag":62,"props":601,"children":602},{},[603],{"type":34,"value":604},"Can the market verify it?",{"type":34,"value":606}," On-chain execution, public dashboards and published rules make accrual credible. Hidden or discretionary programmes do not.",{"type":29,"tag":42,"props":608,"children":610},{"id":609},"token-utility-checklist",[611],{"type":34,"value":612},"Token Utility Checklist",{"type":29,"tag":416,"props":614,"children":615},{},[616,621,626,631,636,641,646,651],{"type":29,"tag":58,"props":617,"children":618},{},[619],{"type":34,"value":620},"Each utility is classified as holding demand or transactional demand",{"type":29,"tag":58,"props":622,"children":623},{},[624],{"type":34,"value":625},"At least one utility requires holding or locking for a meaningful period",{"type":29,"tag":58,"props":627,"children":628},{},[629],{"type":34,"value":630},"Governance controls something with real economic weight",{"type":29,"tag":58,"props":632,"children":633},{},[634],{"type":34,"value":635},"Revenue-to-token routing is written down and rules-based",{"type":29,"tag":58,"props":637,"children":638},{},[639],{"type":34,"value":640},"Expected accrual is modelled against emissions and unlocks",{"type":29,"tag":58,"props":642,"children":643},{},[644],{"type":34,"value":645},"Legal review covers any mechanism that shares revenue with holders",{"type":29,"tag":58,"props":647,"children":648},{},[649],{"type":34,"value":650},"Execution of buybacks or burns is transparent and verifiable on-chain",{"type":29,"tag":58,"props":652,"children":653},{},[654],{"type":34,"value":655},"Utility planned for after TGE is clearly labelled as future, not current",{"type":29,"tag":42,"props":657,"children":659},{"id":658},"how-this-connects-to-liquidity",[660],{"type":34,"value":661},"How This Connects to Liquidity",{"type":29,"tag":30,"props":663,"children":664},{},[665],{"type":34,"value":666},"Utility and accrual shape who holds a token, for how long, and how they react when price moves. Tokens with strong holding demand usually have steadier order books; tokens driven mostly by speculation need more liquidity support to absorb volatility, especially around unlocks. At Fibonacci Capital we look at token design as part of planning market making, because the right depth and spread targets depend on how much organic holding demand a token actually has.",{"type":29,"tag":30,"props":668,"children":669},{},[670,672,678],{"type":34,"value":671},"If you are finalising your tokenomics and want to understand what it means for liquidity after launch, ",{"type":29,"tag":192,"props":673,"children":675},{"href":674},"/",[676],{"type":34,"value":677},"talk to Fibonacci Capital",{"type":34,"value":199},{"title":7,"searchDepth":680,"depth":680,"links":681},2,[682,683,692,693,699,700,701],{"id":44,"depth":680,"text":47},{"id":101,"depth":680,"text":104,"children":684},[685,687,688,689,690,691],{"id":127,"depth":686,"text":130},3,{"id":138,"depth":686,"text":141},{"id":149,"depth":686,"text":152},{"id":160,"depth":686,"text":163},{"id":171,"depth":686,"text":174},{"id":182,"depth":686,"text":185},{"id":202,"depth":680,"text":205},{"id":459,"depth":680,"text":462,"children":694},[695,696,697,698],{"id":465,"depth":686,"text":468},{"id":476,"depth":686,"text":479},{"id":487,"depth":686,"text":490},{"id":506,"depth":686,"text":509},{"id":517,"depth":680,"text":520},{"id":609,"depth":680,"text":612},{"id":658,"depth":680,"text":661},"markdown","content:blog:token-utility-value-accrual.md","content","blog/token-utility-value-accrual.md","blog/token-utility-value-accrual","md",[709,1267,1878],{"_path":710,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"title":711,"description":712,"date":713,"category":12,"readTime":714,"author":11,"tags":715,"keywords":720,"image":721,"body":722,"_type":702,"_id":1264,"_source":704,"_file":1265,"_stem":1266,"_extension":707},"/blog/low-float-vs-high-float-token-launch","Low Float vs High Float Token Launch: How to Choose Your FDV and Circulating Supply","Low float high FDV or high float low FDV? A practical comparison of both token launch models, what each does to price, liquidity and unlocks, and how to choose.","2026-09-21","9 min read",[14,716,717,718,719],"token launch","FDV","circulating supply","TGE","low float high fdv, high float low fdv, token launch valuation, circulating supply at launch, fully diluted valuation crypto, token launch price, Fibonacci Capital","/assets/images/blog/low-float-vs-high-float-token-launch.jpg",{"type":26,"children":723,"toc":1248},[724,730,735,740,746,751,756,924,930,935,940,945,950,956,961,979,989,999,1009,1015,1020,1033,1038,1043,1049,1054,1060,1065,1071,1076,1082,1087,1093,1098,1104,1115,1121,1220,1225,1231,1236],{"type":29,"tag":42,"props":725,"children":727},{"id":726},"low-float-vs-high-float-briefly",[728],{"type":34,"value":729},"Low Float vs High Float, Briefly",{"type":29,"tag":30,"props":731,"children":732},{},[733],{"type":34,"value":734},"A low float launch puts a small share of total supply into circulation at TGE — often in the single-digit percentages — and accepts a high fully diluted valuation as a consequence. A high float launch puts a much larger share into circulation, which produces a lower FDV at the same market cap. The choice is not a branding decision. It determines how much liquidity you need on day one, how violent your unlock schedule feels, how institutional allocators price you, and how much room you have to recover from a bad first month.",{"type":29,"tag":30,"props":736,"children":737},{},[738],{"type":34,"value":739},"Most teams arrive at this decision backwards. They fix a headline FDV first, because that number appears in every launch announcement and every group chat, and then reverse-engineer a float that makes it work. The better order is to decide what kind of market you want to run for the next two years, then let the float and the valuation follow from it.",{"type":29,"tag":42,"props":741,"children":743},{"id":742},"the-two-models-defined-properly",[744],{"type":34,"value":745},"The Two Models, Defined Properly",{"type":29,"tag":30,"props":747,"children":748},{},[749],{"type":34,"value":750},"Float is the portion of total supply that is actually transferable and tradable at launch. FDV is the launch price multiplied by total supply — every token that will ever exist, including the ones locked for four years. Market cap is the launch price multiplied by the float.",{"type":29,"tag":30,"props":752,"children":753},{},[754],{"type":34,"value":755},"The arithmetic is unforgiving. If you want a given market cap at launch and you shrink the float, the price per token must rise, and FDV rises with it. Shrinking the float does not create value; it relocates the valuation from the part of the supply people can trade to the part they cannot.",{"type":29,"tag":212,"props":757,"children":758},{},[759,778],{"type":29,"tag":216,"props":760,"children":761},{},[762],{"type":29,"tag":220,"props":763,"children":764},{},[765,768,773],{"type":29,"tag":224,"props":766,"children":767},{},[],{"type":29,"tag":224,"props":769,"children":770},{},[771],{"type":34,"value":772},"Low float, high FDV",{"type":29,"tag":224,"props":774,"children":775},{},[776],{"type":34,"value":777},"High float, low FDV",{"type":29,"tag":245,"props":779,"children":780},{},[781,799,817,835,852,870,888,906],{"type":29,"tag":220,"props":782,"children":783},{},[784,789,794],{"type":29,"tag":252,"props":785,"children":786},{},[787],{"type":34,"value":788},"Circulating at TGE",{"type":29,"tag":252,"props":790,"children":791},{},[792],{"type":34,"value":793},"Small share of total supply",{"type":29,"tag":252,"props":795,"children":796},{},[797],{"type":34,"value":798},"Large share of total supply",{"type":29,"tag":220,"props":800,"children":801},{},[802,807,812],{"type":29,"tag":252,"props":803,"children":804},{},[805],{"type":34,"value":806},"Launch price per token",{"type":29,"tag":252,"props":808,"children":809},{},[810],{"type":34,"value":811},"Higher",{"type":29,"tag":252,"props":813,"children":814},{},[815],{"type":34,"value":816},"Lower",{"type":29,"tag":220,"props":818,"children":819},{},[820,825,830],{"type":29,"tag":252,"props":821,"children":822},{},[823],{"type":34,"value":824},"Liquidity needed to hold a given depth",{"type":29,"tag":252,"props":826,"children":827},{},[828],{"type":34,"value":829},"Lower in dollar terms",{"type":29,"tag":252,"props":831,"children":832},{},[833],{"type":34,"value":834},"Higher in dollar terms",{"type":29,"tag":220,"props":836,"children":837},{},[838,843,848],{"type":29,"tag":252,"props":839,"children":840},{},[841],{"type":34,"value":842},"Price sensitivity to a single large order",{"type":29,"tag":252,"props":844,"children":845},{},[846],{"type":34,"value":847},"High",{"type":29,"tag":252,"props":849,"children":850},{},[851],{"type":34,"value":816},{"type":29,"tag":220,"props":853,"children":854},{},[855,860,865],{"type":29,"tag":252,"props":856,"children":857},{},[858],{"type":34,"value":859},"Unlock events",{"type":29,"tag":252,"props":861,"children":862},{},[863],{"type":34,"value":864},"Large relative to float, repeated for years",{"type":29,"tag":252,"props":866,"children":867},{},[868],{"type":34,"value":869},"Smaller relative to float, shorter tail",{"type":29,"tag":220,"props":871,"children":872},{},[873,878,883],{"type":29,"tag":252,"props":874,"children":875},{},[876],{"type":34,"value":877},"Headline valuation",{"type":29,"tag":252,"props":879,"children":880},{},[881],{"type":34,"value":882},"Flattering",{"type":29,"tag":252,"props":884,"children":885},{},[886],{"type":34,"value":887},"Modest",{"type":29,"tag":220,"props":889,"children":890},{},[891,896,901],{"type":29,"tag":252,"props":892,"children":893},{},[894],{"type":34,"value":895},"Room to appreciate post-launch",{"type":29,"tag":252,"props":897,"children":898},{},[899],{"type":34,"value":900},"Compressed — the valuation is already booked",{"type":29,"tag":252,"props":902,"children":903},{},[904],{"type":34,"value":905},"Larger — growth can be priced in later",{"type":29,"tag":220,"props":907,"children":908},{},[909,914,919],{"type":29,"tag":252,"props":910,"children":911},{},[912],{"type":34,"value":913},"Typical failure mode",{"type":29,"tag":252,"props":915,"children":916},{},[917],{"type":34,"value":918},"Slow bleed as each unlock resets the price",{"type":29,"tag":252,"props":920,"children":921},{},[922],{"type":34,"value":923},"Underpricing the raise, dilution of early believers",{"type":29,"tag":42,"props":925,"children":927},{"id":926},"why-low-float-became-the-default",[928],{"type":34,"value":929},"Why Low Float Became the Default",{"type":29,"tag":30,"props":931,"children":932},{},[933],{"type":34,"value":934},"Low float launches spread for reasons that made sense to the people choosing them.",{"type":29,"tag":30,"props":936,"children":937},{},[938],{"type":34,"value":939},"A small float is cheaper to support. If only a fraction of supply trades, the dollar cost of maintaining a respectable order book is lower, and a modest amount of buying moves the price a long way — which looks like strength in the first week.",{"type":29,"tag":30,"props":941,"children":942},{},[943],{"type":34,"value":944},"A high FDV also anchors the raise. If the last private round priced the project at a given valuation, launching below it is an uncomfortable conversation with investors who expect a mark-up, not a mark-down. Low float lets a team print a launch valuation above the last round without actually distributing much supply.",{"type":29,"tag":30,"props":946,"children":947},{},[948],{"type":34,"value":949},"And the headline number travels. FDV is the figure that gets quoted, compared and screenshotted, so there is a straightforward incentive to make it large.",{"type":29,"tag":42,"props":951,"children":953},{"id":952},"why-low-float-has-been-punishing",[954],{"type":34,"value":955},"Why Low Float Has Been Punishing",{"type":29,"tag":30,"props":957,"children":958},{},[959],{"type":34,"value":960},"The problem shows up in months two through twenty-four, not in week one.",{"type":29,"tag":30,"props":962,"children":963},{},[964,969,971,977],{"type":29,"tag":62,"props":965,"children":966},{},[967],{"type":34,"value":968},"Every unlock is enormous relative to the float.",{"type":34,"value":970}," If a small share of supply trades and a vesting tranche releases a comparable amount, the tradable supply can change by a large multiple in a single day. The market does not need to sell all of it to reprice — it only needs to anticipate that some of it will sell. Our guide to ",{"type":29,"tag":192,"props":972,"children":974},{"href":973},"/blog/token-unlocks-managing-sell-pressure",[975],{"type":34,"value":976},"managing token unlock sell pressure",{"type":34,"value":978}," covers the mechanics, but the short version is that the ratio of unlock size to float and to daily volume is what determines the damage, and a low float makes both ratios worse by construction.",{"type":29,"tag":30,"props":980,"children":981},{},[982,987],{"type":29,"tag":62,"props":983,"children":984},{},[985],{"type":34,"value":986},"There is no headroom.",{"type":34,"value":988}," A project that launches at a fully diluted valuation comparable to established protocols has already sold the market its own future. Buyers at that level are not buying growth; they are buying a claim that is priced as if execution has already happened. When the market decides it wants to own the sector, it tends to buy something cheaper instead.",{"type":29,"tag":30,"props":990,"children":991},{},[992,997],{"type":29,"tag":62,"props":993,"children":994},{},[995],{"type":34,"value":996},"Thin float makes price fragile in both directions.",{"type":34,"value":998}," The same mechanism that produces a flattering green candle on modest buying produces a brutal one on modest selling. A market that a single order can move several percent is not a market institutional desks want to size into, and a token that cannot absorb size does not attract the treasuries, funds and structured buyers that a project wants on its cap table by year two.",{"type":29,"tag":30,"props":1000,"children":1001},{},[1002,1007],{"type":29,"tag":62,"props":1003,"children":1004},{},[1005],{"type":34,"value":1006},"Allocators have learned to look through it.",{"type":34,"value":1008}," Sophisticated buyers now normalise on FDV and unlock schedules as a matter of routine. The headline market cap is no longer the number that gets a project into a diligence process.",{"type":29,"tag":42,"props":1010,"children":1012},{"id":1011},"why-high-float-is-not-automatically-the-answer",[1013],{"type":34,"value":1014},"Why High Float Is Not Automatically the Answer",{"type":29,"tag":30,"props":1016,"children":1017},{},[1018],{"type":34,"value":1019},"The reaction to low float has been a swing toward putting far more supply in circulation at launch, and that has its own costs.",{"type":29,"tag":30,"props":1021,"children":1022},{},[1023,1025,1031],{"type":34,"value":1024},"A larger float needs materially more capital to keep the book deep. Depth is measured in dollars, not in tokens, and a bigger tradable supply at a lower price still needs a real order book at every level a buyer might work. If you launch with a large float and fund liquidity as though you had a small one, you get a wide, thin market that is worse than either model done properly. Our piece on ",{"type":29,"tag":192,"props":1026,"children":1028},{"href":1027},"/blog/how-much-liquidity-does-a-token-need-at-launch",[1029],{"type":34,"value":1030},"how much liquidity a token needs at launch",{"type":34,"value":1032}," sets out how to size this.",{"type":29,"tag":30,"props":1034,"children":1035},{},[1036],{"type":34,"value":1037},"A high float also means selling more of the project at whatever price the market gives you on day one. If your token launches into a poor tape, you have distributed a large share of supply at a valuation you will spend two years trying to grow past — and you have less locked supply left to fund the ecosystem, incentives and future rounds.",{"type":29,"tag":30,"props":1039,"children":1040},{},[1041],{"type":34,"value":1042},"And the float has to go somewhere real. A large circulating number made up of tokens sitting in a treasury wallet that everyone can see is not float in any meaningful sense; it is an unlock with extra steps.",{"type":29,"tag":42,"props":1044,"children":1046},{"id":1045},"the-decision-framework",[1047],{"type":34,"value":1048},"The Decision Framework",{"type":29,"tag":30,"props":1050,"children":1051},{},[1052],{"type":34,"value":1053},"Work through these in order. The float falls out of the answers rather than being chosen first.",{"type":29,"tag":125,"props":1055,"children":1057},{"id":1056},"_1-what-does-your-market-have-to-absorb-and-when",[1058],{"type":34,"value":1059},"1. What does your market have to absorb, and when?",{"type":29,"tag":30,"props":1061,"children":1062},{},[1063],{"type":34,"value":1064},"List every event in the first 24 months that will put supply into the market: cliff unlocks, linear vesting, emissions, airdrop claims, ecosystem grants, market maker loan returns. For each, express the size as a percentage of the float you are considering. If any single event is a large multiple of your float, that float is too small. This one test eliminates most aggressive low float designs before any other consideration.",{"type":29,"tag":125,"props":1066,"children":1068},{"id":1067},"_2-how-much-liquidity-can-you-actually-fund",[1069],{"type":34,"value":1070},"2. How much liquidity can you actually fund?",{"type":29,"tag":30,"props":1072,"children":1073},{},[1074],{"type":34,"value":1075},"Decide the depth you want inside a tight band of the mid price and the number of venues you want it on, then price that. Liquidity is a real budget line, whether provided under a retainer or a loan-and-option structure. A float you cannot afford to support is a decision to run a thin market, and a thin market is what most post-launch collapses are actually made of.",{"type":29,"tag":125,"props":1077,"children":1079},{"id":1078},"_3-what-did-your-last-round-price-at-and-how-honest-is-it",[1080],{"type":34,"value":1081},"3. What did your last round price at, and how honest is it?",{"type":29,"tag":30,"props":1083,"children":1084},{},[1085],{"type":34,"value":1086},"If your private valuation only works with a small float, the valuation is the problem, not the float. Launching at or near a defensible valuation with a healthy float is a far better position than launching above an indefensible one and defending it with scarcity for two years.",{"type":29,"tag":125,"props":1088,"children":1090},{"id":1089},"_4-who-do-you-want-holding-the-token-in-year-two",[1091],{"type":34,"value":1092},"4. Who do you want holding the token in year two?",{"type":29,"tag":30,"props":1094,"children":1095},{},[1096],{"type":34,"value":1097},"If the answer includes funds, treasuries or anyone buying in size, you need a market that can take size — which means enough float and enough depth that a meaningful order does not move the price several percent. If the answer is a retail-and-community base, you have more freedom, but you also have less capital to absorb unlocks.",{"type":29,"tag":125,"props":1099,"children":1101},{"id":1100},"_5-what-does-your-emissions-curve-do-to-the-float",[1102],{"type":34,"value":1103},"5. What does your emissions curve do to the float?",{"type":29,"tag":30,"props":1105,"children":1106},{},[1107,1109,1113],{"type":34,"value":1108},"Float is not static. A staking or liquidity mining programme adds supply continuously. Model the float at month 6, 12 and 24, not just at TGE, and check that the liquidity plan scales with it. The design principles in our ",{"type":29,"tag":192,"props":1110,"children":1111},{"href":581},[1112],{"type":34,"value":584},{"type":34,"value":1114}," apply here — supply policy and liquidity policy are the same decision viewed from two angles.",{"type":29,"tag":42,"props":1116,"children":1118},{"id":1117},"a-practical-checklist-before-you-fix-the-number",[1119],{"type":34,"value":1120},"A Practical Checklist Before You Fix the Number",{"type":29,"tag":416,"props":1122,"children":1125},{"className":1123},[1124],"contains-task-list",[1126,1139,1148,1157,1166,1175,1184,1193,1202,1211],{"type":29,"tag":58,"props":1127,"children":1130},{"className":1128},[1129],"task-list-item",[1131,1137],{"type":29,"tag":1132,"props":1133,"children":1136},"input",{"disabled":1134,"type":1135},true,"checkbox",[],{"type":34,"value":1138}," Float at TGE expressed as a percentage of total supply, written down and justified",{"type":29,"tag":58,"props":1140,"children":1142},{"className":1141},[1129],[1143,1146],{"type":29,"tag":1132,"props":1144,"children":1145},{"disabled":1134,"type":1135},[],{"type":34,"value":1147}," Every unlock in the first 24 months sized against that float and against projected daily volume",{"type":29,"tag":58,"props":1149,"children":1151},{"className":1150},[1129],[1152,1155],{"type":29,"tag":1132,"props":1153,"children":1154},{"disabled":1134,"type":1135},[],{"type":34,"value":1156}," No single unlock event that is a large multiple of the circulating float",{"type":29,"tag":58,"props":1158,"children":1160},{"className":1159},[1129],[1161,1164],{"type":29,"tag":1132,"props":1162,"children":1163},{"disabled":1134,"type":1135},[],{"type":34,"value":1165}," Largest unlock cliffs broken into linear releases wherever contractually possible",{"type":29,"tag":58,"props":1167,"children":1169},{"className":1168},[1129],[1170,1173],{"type":29,"tag":1132,"props":1171,"children":1172},{"disabled":1134,"type":1135},[],{"type":34,"value":1174}," Liquidity budget priced for the actual float, across every venue you intend to list on",{"type":29,"tag":58,"props":1176,"children":1178},{"className":1177},[1129],[1179,1182],{"type":29,"tag":1132,"props":1180,"children":1181},{"disabled":1134,"type":1135},[],{"type":34,"value":1183}," Depth targets defined in dollars within a stated band of the mid price, not in vague terms",{"type":29,"tag":58,"props":1185,"children":1187},{"className":1186},[1129],[1188,1191],{"type":29,"tag":1132,"props":1189,"children":1190},{"disabled":1134,"type":1135},[],{"type":34,"value":1192}," Launch valuation defensible against comparable projects on FDV, not on market cap",{"type":29,"tag":58,"props":1194,"children":1196},{"className":1195},[1129],[1197,1200],{"type":29,"tag":1132,"props":1198,"children":1199},{"disabled":1134,"type":1135},[],{"type":34,"value":1201}," Treasury and ecosystem wallets excluded from any circulating supply figure you publish",{"type":29,"tag":58,"props":1203,"children":1205},{"className":1204},[1129],[1206,1209],{"type":29,"tag":1132,"props":1207,"children":1208},{"disabled":1134,"type":1135},[],{"type":34,"value":1210}," Float projected at month 6, 12 and 24 including emissions",{"type":29,"tag":58,"props":1212,"children":1214},{"className":1213},[1129],[1215,1218],{"type":29,"tag":1132,"props":1216,"children":1217},{"disabled":1134,"type":1135},[],{"type":34,"value":1219}," Market maker engaged before the price and float are finalised, not after",{"type":29,"tag":30,"props":1221,"children":1222},{},[1223],{"type":34,"value":1224},"That last point is the one teams get wrong most often. The float and the launch price determine what a market maker can and cannot do for you. Bringing a liquidity partner in after those numbers are locked means asking them to defend a structure they had no chance to flag. At Fibonacci Capital, the conversations that go best are the ones that happen while the supply schedule is still a draft.",{"type":29,"tag":42,"props":1226,"children":1228},{"id":1227},"the-honest-verdict",[1229],{"type":34,"value":1230},"The Honest Verdict",{"type":29,"tag":30,"props":1232,"children":1233},{},[1234],{"type":34,"value":1235},"There is no universally correct float. But the direction of travel is clear: a moderate float with a defensible valuation and unlock tranches sized so the market can digest them will outperform a scarcity-engineered launch that has to be defended every quarter. Low float buys you a better first headline and a worse second year. High float buys you a harder day one and a market that can actually grow.",{"type":29,"tag":30,"props":1237,"children":1238},{},[1239,1241,1247],{"type":34,"value":1240},"Whichever you choose, the structure only works if the order book underneath it is real. Supply design decides how much the market has to absorb; liquidity decides whether it can. If you are setting your float and launch valuation now and want the liquidity side modelled against it before the numbers are final, ",{"type":29,"tag":192,"props":1242,"children":1244},{"href":1243},"/pretge",[1245],{"type":34,"value":1246},"get in touch",{"type":34,"value":199},{"title":7,"searchDepth":680,"depth":680,"links":1249},[1250,1251,1252,1253,1254,1255,1262,1263],{"id":726,"depth":680,"text":729},{"id":742,"depth":680,"text":745},{"id":926,"depth":680,"text":929},{"id":952,"depth":680,"text":955},{"id":1011,"depth":680,"text":1014},{"id":1045,"depth":680,"text":1048,"children":1256},[1257,1258,1259,1260,1261],{"id":1056,"depth":686,"text":1059},{"id":1067,"depth":686,"text":1070},{"id":1078,"depth":686,"text":1081},{"id":1089,"depth":686,"text":1092},{"id":1100,"depth":686,"text":1103},{"id":1117,"depth":680,"text":1120},{"id":1227,"depth":680,"text":1230},"content:blog:low-float-vs-high-float-token-launch.md","blog/low-float-vs-high-float-token-launch.md","blog/low-float-vs-high-float-token-launch",{"_path":431,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"title":1268,"description":1269,"date":1270,"category":12,"readTime":714,"author":11,"tags":1271,"keywords":1276,"image":1277,"body":1278,"_type":702,"_id":1875,"_source":704,"_file":1876,"_stem":1877,"_extension":707},"Token Buyback Programs: Burn, Hold or Redistribute?","A practical guide to token buyback programs: how buyback and burn compares to holding or redistributing, how to fund one, and how to execute without moving your own market.","2026-08-21",[1272,1273,14,1274,1275],"token buyback","buyback and burn","treasury","supply design","token buyback, buyback and burn crypto, token buyback program, crypto buyback and burn vs hold, how to fund a token buyback, token burn mechanism, Fibonacci Capital","/assets/images/blog/token-buyback-programs-guide.jpg",{"type":26,"children":1279,"toc":1860},[1280,1286,1291,1296,1301,1307,1312,1497,1502,1512,1522,1532,1544,1550,1555,1588,1601,1606,1612,1617,1623,1628,1634,1647,1653,1665,1671,1676,1682,1687,1693,1698,1708,1718,1726,1744,1754,1764,1774,1780,1785,1833,1839,1844,1849],{"type":29,"tag":42,"props":1281,"children":1283},{"id":1282},"what-a-token-buyback-program-actually-is",[1284],{"type":34,"value":1285},"What a Token Buyback Program Actually Is",{"type":29,"tag":30,"props":1287,"children":1288},{},[1289],{"type":34,"value":1290},"A token buyback program is a standing commitment by a project to use revenue or treasury funds to purchase its own token on the open market. What happens next is the part teams get wrong: the tokens can be burned (sent to an unrecoverable address and removed from supply), held in the treasury, or redistributed to stakers and liquidity providers. Those three choices produce very different outcomes, and \"buyback and burn\" is announced far more often than it is thought through.",{"type":29,"tag":30,"props":1292,"children":1293},{},[1294],{"type":34,"value":1295},"The appeal is obvious. A buyback converts protocol revenue into visible, verifiable demand for your token, and it gives holders a reason to care about the business rather than the narrative. The risk is equally real: a buyback funded from a treasury that has no recurring revenue is just a slow sale of your own runway, and a badly executed buy program tells the whole market exactly when and where you will be buying.",{"type":29,"tag":30,"props":1297,"children":1298},{},[1299],{"type":34,"value":1300},"This guide covers the three structures, how to decide which one fits your project, how to fund a program honestly, and the execution mechanics that determine whether you get value for the money you spend.",{"type":29,"tag":42,"props":1302,"children":1304},{"id":1303},"buyback-and-burn-vs-buyback-and-hold-vs-buyback-and-redistribute",[1305],{"type":34,"value":1306},"Buyback and Burn vs Buyback and Hold vs Buyback and Redistribute",{"type":29,"tag":30,"props":1308,"children":1309},{},[1310],{"type":34,"value":1311},"All three start the same way — the project buys tokens on the market — and diverge entirely at the point of what happens to those tokens.",{"type":29,"tag":212,"props":1313,"children":1314},{},[1315,1338],{"type":29,"tag":216,"props":1316,"children":1317},{},[1318],{"type":29,"tag":220,"props":1319,"children":1320},{},[1321,1324,1328,1333],{"type":29,"tag":224,"props":1322,"children":1323},{},[],{"type":29,"tag":224,"props":1325,"children":1326},{},[1327],{"type":34,"value":256},{"type":29,"tag":224,"props":1329,"children":1330},{},[1331],{"type":34,"value":1332},"Buyback and hold",{"type":29,"tag":224,"props":1334,"children":1335},{},[1336],{"type":34,"value":1337},"Buyback and redistribute",{"type":29,"tag":245,"props":1339,"children":1340},{},[1341,1367,1393,1419,1445,1471],{"type":29,"tag":220,"props":1342,"children":1343},{},[1344,1352,1357,1362],{"type":29,"tag":252,"props":1345,"children":1346},{},[1347],{"type":29,"tag":62,"props":1348,"children":1349},{},[1350],{"type":34,"value":1351},"Effect on circulating supply",{"type":29,"tag":252,"props":1353,"children":1354},{},[1355],{"type":34,"value":1356},"Permanent reduction",{"type":29,"tag":252,"props":1358,"children":1359},{},[1360],{"type":34,"value":1361},"Removed from circulation but recoverable",{"type":29,"tag":252,"props":1363,"children":1364},{},[1365],{"type":34,"value":1366},"Returns to circulation with recipients",{"type":29,"tag":220,"props":1368,"children":1369},{},[1370,1378,1383,1388],{"type":29,"tag":252,"props":1371,"children":1372},{},[1373],{"type":29,"tag":62,"props":1374,"children":1375},{},[1376],{"type":34,"value":1377},"Reversibility",{"type":29,"tag":252,"props":1379,"children":1380},{},[1381],{"type":34,"value":1382},"None. This is the point and the risk",{"type":29,"tag":252,"props":1384,"children":1385},{},[1386],{"type":34,"value":1387},"Full. Treasury can redeploy",{"type":29,"tag":252,"props":1389,"children":1390},{},[1391],{"type":34,"value":1392},"Partial",{"type":29,"tag":220,"props":1394,"children":1395},{},[1396,1404,1409,1414],{"type":29,"tag":252,"props":1397,"children":1398},{},[1399],{"type":29,"tag":62,"props":1400,"children":1401},{},[1402],{"type":34,"value":1403},"Who benefits",{"type":29,"tag":252,"props":1405,"children":1406},{},[1407],{"type":34,"value":1408},"All holders, proportionally and passively",{"type":29,"tag":252,"props":1410,"children":1411},{},[1412],{"type":34,"value":1413},"The project first, holders indirectly",{"type":29,"tag":252,"props":1415,"children":1416},{},[1417],{"type":34,"value":1418},"Stakers, LPs, or whoever the program targets",{"type":29,"tag":220,"props":1420,"children":1421},{},[1422,1430,1435,1440],{"type":29,"tag":252,"props":1423,"children":1424},{},[1425],{"type":29,"tag":62,"props":1426,"children":1427},{},[1428],{"type":34,"value":1429},"Signal sent",{"type":29,"tag":252,"props":1431,"children":1432},{},[1433],{"type":34,"value":1434},"Confidence, permanence, deflationary intent",{"type":29,"tag":252,"props":1436,"children":1437},{},[1438],{"type":34,"value":1439},"Prudence, optionality",{"type":29,"tag":252,"props":1441,"children":1442},{},[1443],{"type":34,"value":1444},"Direct reward for a specific behaviour",{"type":29,"tag":220,"props":1446,"children":1447},{},[1448,1456,1461,1466],{"type":29,"tag":252,"props":1449,"children":1450},{},[1451],{"type":29,"tag":62,"props":1452,"children":1453},{},[1454],{"type":34,"value":1455},"Main failure mode",{"type":29,"tag":252,"props":1457,"children":1458},{},[1459],{"type":34,"value":1460},"Destroying capital you later need",{"type":29,"tag":252,"props":1462,"children":1463},{},[1464],{"type":34,"value":1465},"Community reads it as a sale waiting to happen",{"type":29,"tag":252,"props":1467,"children":1468},{},[1469],{"type":34,"value":1470},"Attracts mercenary capital that leaves when yields drop",{"type":29,"tag":220,"props":1472,"children":1473},{},[1474,1482,1487,1492],{"type":29,"tag":252,"props":1475,"children":1476},{},[1477],{"type":29,"tag":62,"props":1478,"children":1479},{},[1480],{"type":34,"value":1481},"Best suited to",{"type":29,"tag":252,"props":1483,"children":1484},{},[1485],{"type":34,"value":1486},"Mature protocols with durable revenue",{"type":29,"tag":252,"props":1488,"children":1489},{},[1490],{"type":34,"value":1491},"Projects with uncertain revenue or future capital needs",{"type":29,"tag":252,"props":1493,"children":1494},{},[1495],{"type":34,"value":1496},"Protocols that need to reward a specific behaviour, such as liquidity provision",{"type":29,"tag":30,"props":1498,"children":1499},{},[1500],{"type":34,"value":1501},"A few honest observations on the trade-offs.",{"type":29,"tag":30,"props":1503,"children":1504},{},[1505,1510],{"type":29,"tag":62,"props":1506,"children":1507},{},[1508],{"type":34,"value":1509},"Burning is a one-way door.",{"type":34,"value":1511}," Tokens sent to a burn address cannot fund a future exchange listing, a market making inventory, an ecosystem grant, or an emergency. Teams routinely underestimate how many future obligations a treasury quietly carries. Burn only what you are confident you will never need, and size the program so that a bad year does not force you to sell other assets to cover operations.",{"type":29,"tag":30,"props":1513,"children":1514},{},[1515,1520],{"type":29,"tag":62,"props":1516,"children":1517},{},[1518],{"type":34,"value":1519},"Holding is defensible but must be explained.",{"type":34,"value":1521}," Repurchased tokens sitting in a treasury wallet look, to the market, exactly like a future sell wall. If you choose this route, commit publicly to what the tokens can and cannot be used for, put them behind a timelock or multisig with a published policy, and label the wallet so on-chain trackers do not misread routine transfers as distribution.",{"type":29,"tag":30,"props":1523,"children":1524},{},[1525,1530],{"type":29,"tag":62,"props":1526,"children":1527},{},[1528],{"type":34,"value":1529},"Redistribution is a yield program wearing a buyback costume.",{"type":34,"value":1531}," It can be the right choice — routing bought tokens to liquidity providers deepens your order books and reduces the cost of the very market you trade in — but be clear internally that you are buying a behaviour, not reducing supply. If you stop, the behaviour stops with it.",{"type":29,"tag":30,"props":1533,"children":1534},{},[1535,1537,1542],{"type":34,"value":1536},"A fourth option deserves naming: ",{"type":29,"tag":62,"props":1538,"children":1539},{},[1540],{"type":34,"value":1541},"do not run a buyback at all.",{"type":34,"value":1543}," For most pre-revenue projects, capital spent on buybacks buys a short price effect and nothing durable. The same money spent on engineering, listings, or deeper liquidity usually compounds better. A buyback is a way to return value to holders once you have value to return. It is a poor substitute for having a business.",{"type":29,"tag":42,"props":1545,"children":1547},{"id":1546},"how-to-fund-a-buyback-program-without-fooling-yourself",[1548],{"type":34,"value":1549},"How to Fund a Buyback Program Without Fooling Yourself",{"type":29,"tag":30,"props":1551,"children":1552},{},[1553],{"type":34,"value":1554},"The funding source determines whether a buyback is sustainable or is quietly a liquidation. Three broad sources, in descending order of durability:",{"type":29,"tag":54,"props":1556,"children":1557},{},[1558,1568,1578],{"type":29,"tag":58,"props":1559,"children":1560},{},[1561,1566],{"type":29,"tag":62,"props":1562,"children":1563},{},[1564],{"type":34,"value":1565},"Protocol revenue.",{"type":34,"value":1567}," Trading fees, subscription income, interest margin, sequencer revenue — money the protocol earns from users. This is the only source that can support an open-ended commitment, because it refills.",{"type":29,"tag":58,"props":1569,"children":1570},{},[1571,1576],{"type":29,"tag":62,"props":1572,"children":1573},{},[1574],{"type":34,"value":1575},"Treasury stablecoins.",{"type":34,"value":1577}," Fixed and finite. Spending stablecoins on buybacks reduces your operating runway one to one. This can be a legitimate one-off use of surplus reserves, but it should be framed as a discrete program with a defined size, not an ongoing policy.",{"type":29,"tag":58,"props":1579,"children":1580},{},[1581,1586],{"type":29,"tag":62,"props":1582,"children":1583},{},[1584],{"type":34,"value":1585},"Sales of other treasury assets.",{"type":34,"value":1587}," Selling BTC, ETH or investment positions to buy your own token concentrates treasury risk at exactly the moment you would want it diversified. Very hard to justify.",{"type":29,"tag":30,"props":1589,"children":1590},{},[1591,1593,1599],{"type":34,"value":1592},"Before you commit to any recurring program, run the numbers under a downside case. If revenue fell by half and your token price fell by two thirds, would the program still be affordable, and would you still want to be buying? A commitment you have to abandon in a drawdown does more damage to credibility than never making it. This is where buyback policy and ",{"type":29,"tag":192,"props":1594,"children":1596},{"href":1595},"/blog/treasury-management-crypto-projects",[1597],{"type":34,"value":1598},"treasury management",{"type":34,"value":1600}," have to be designed as one thing rather than two.",{"type":29,"tag":30,"props":1602,"children":1603},{},[1604],{"type":34,"value":1605},"Consider expressing the commitment as a percentage of realised revenue rather than a fixed currency amount. \"We allocate 20% of protocol fees to buybacks each quarter\" scales down naturally in bad periods without requiring you to break a promise. \"We will buy $500,000 of token per quarter\" does not.",{"type":29,"tag":42,"props":1607,"children":1609},{"id":1608},"execution-the-part-most-teams-get-wrong",[1610],{"type":34,"value":1611},"Execution: The Part Most Teams Get Wrong",{"type":29,"tag":30,"props":1613,"children":1614},{},[1615],{"type":34,"value":1616},"A well-designed program can still waste most of its budget in execution. Buying your own token is a trading problem, and it has all the usual hazards plus a few specific to this situation.",{"type":29,"tag":125,"props":1618,"children":1620},{"id":1619},"you-are-the-most-predictable-buyer-in-the-market",[1621],{"type":34,"value":1622},"You are the most predictable buyer in the market",{"type":29,"tag":30,"props":1624,"children":1625},{},[1626],{"type":34,"value":1627},"If you announce a fixed size, a fixed schedule and a single venue, you have told every trader on that venue when to front-run you. The market prices the buy before you make it, you fill higher, and the price gives it all back once you stop. Vary timing within a window, use more than one venue where liquidity allows, and publish results after the fact rather than intentions in advance.",{"type":29,"tag":125,"props":1629,"children":1631},{"id":1630},"market-impact-eats-the-budget",[1632],{"type":34,"value":1633},"Market impact eats the budget",{"type":29,"tag":30,"props":1635,"children":1636},{},[1637,1639,1645],{"type":34,"value":1638},"Executing a large buy as a single market order walks the book and fills you at a much worse average price than the quoted top of book. The cost is real and it is proportional to how thin your order books are. Splitting the order over time — a TWAP-style execution, meaning the buy is spread evenly across a set period — reduces this substantially. If you do not understand how much ",{"type":29,"tag":192,"props":1640,"children":1642},{"href":1641},"/blog/what-is-slippage-in-crypto-trading",[1643],{"type":34,"value":1644},"slippage",{"type":34,"value":1646}," your own size causes, you cannot know whether your buyback delivered value or simply paid the spread to more sophisticated participants.",{"type":29,"tag":125,"props":1648,"children":1650},{"id":1649},"buybacks-interact-with-everything-else-you-are-doing",[1651],{"type":34,"value":1652},"Buybacks interact with everything else you are doing",{"type":29,"tag":30,"props":1654,"children":1655},{},[1656,1658,1663],{"type":34,"value":1657},"A buyback executed in the same week as a large ",{"type":29,"tag":192,"props":1659,"children":1660},{"href":973},[1661],{"type":34,"value":1662},"token unlock",{"type":34,"value":1664}," is, functionally, the project buying tokens from its own insiders with protocol revenue. That may be defensible, or it may be exactly the optics you cannot afford. Map buybacks against your unlock schedule, ecosystem distributions and any market making inventory movements before you set the calendar.",{"type":29,"tag":125,"props":1666,"children":1668},{"id":1667},"on-chain-and-off-chain-buys-behave-differently",[1669],{"type":34,"value":1670},"On-chain and off-chain buys behave differently",{"type":29,"tag":30,"props":1672,"children":1673},{},[1674],{"type":34,"value":1675},"Buying through an automated market maker is transparent and easy to verify, which is good for credibility, but the transaction sits in the mempool for anyone to see and act on, and the pool depth caps your realistic size. Buying on centralised order books gives you better depth and execution control at the cost of verifiability — which you can recover by publishing exchange statements or a signed attestation after each program period.",{"type":29,"tag":125,"props":1677,"children":1679},{"id":1678},"do-not-create-a-false-market",[1680],{"type":34,"value":1681},"Do not create a false market",{"type":29,"tag":30,"props":1683,"children":1684},{},[1685],{"type":34,"value":1686},"There is a bright line between buying your own token as a disclosed capital-allocation policy and trading it to create a misleading impression of demand. Buybacks that are timed to defend a specific price level, coordinated with announcements, or run through undisclosed accounts move toward the second category and can attract regulatory attention in many jurisdictions. Keep the policy public, keep the execution boring, keep the records, and take legal advice in your relevant jurisdictions before you launch.",{"type":29,"tag":42,"props":1688,"children":1690},{"id":1689},"a-decision-framework",[1691],{"type":34,"value":1692},"A Decision Framework",{"type":29,"tag":30,"props":1694,"children":1695},{},[1696],{"type":34,"value":1697},"Work through these in order. If you fail an early one, the later ones do not matter.",{"type":29,"tag":30,"props":1699,"children":1700},{},[1701,1706],{"type":29,"tag":62,"props":1702,"children":1703},{},[1704],{"type":34,"value":1705},"1. Do you have recurring revenue that is not itself token emissions?",{"type":34,"value":1707},"\nNo — do not run a recurring buyback. Revisit when you do.",{"type":29,"tag":30,"props":1709,"children":1710},{},[1711,1716],{"type":29,"tag":62,"props":1712,"children":1713},{},[1714],{"type":34,"value":1715},"2. Is your treasury runway comfortable for at least 18 to 24 months after the program?",{"type":34,"value":1717},"\nNo — the program is too large. Cut it or defer it.",{"type":29,"tag":30,"props":1719,"children":1720},{},[1721],{"type":29,"tag":62,"props":1722,"children":1723},{},[1724],{"type":34,"value":1725},"3. What problem is the buyback solving?",{"type":29,"tag":416,"props":1727,"children":1728},{},[1729,1734,1739],{"type":29,"tag":58,"props":1730,"children":1731},{},[1732],{"type":34,"value":1733},"Returning value to holders from real earnings — burn or hold both work.",{"type":29,"tag":58,"props":1735,"children":1736},{},[1737],{"type":34,"value":1738},"Offsetting emissions — size it against actual emission rates, and be honest publicly if it only offsets part.",{"type":29,"tag":58,"props":1740,"children":1741},{},[1742],{"type":34,"value":1743},"Supporting the price — this is not a buyback strategy. Reconsider.",{"type":29,"tag":30,"props":1745,"children":1746},{},[1747,1752],{"type":29,"tag":62,"props":1748,"children":1749},{},[1750],{"type":34,"value":1751},"4. Will you ever need these tokens again?",{"type":34,"value":1753},"\nYes, or unsure — hold rather than burn. You can always burn later. You can never unburn.",{"type":29,"tag":30,"props":1755,"children":1756},{},[1757,1762],{"type":29,"tag":62,"props":1758,"children":1759},{},[1760],{"type":34,"value":1761},"5. Are your order books deep enough to absorb your intended size without visible distortion?",{"type":34,"value":1763},"\nNo — fix liquidity first. Buying into thin books is expensive and produces a price move that reverses as soon as you stop.",{"type":29,"tag":30,"props":1765,"children":1766},{},[1767,1772],{"type":29,"tag":62,"props":1768,"children":1769},{},[1770],{"type":34,"value":1771},"6. Can you commit to publishing what you did, every period, including the periods when you bought nothing?",{"type":34,"value":1773},"\nNo — do not announce a program at all. An abandoned buyback is worse than no buyback.",{"type":29,"tag":42,"props":1775,"children":1777},{"id":1776},"pre-launch-checklist",[1778],{"type":34,"value":1779},"Pre-Launch Checklist",{"type":29,"tag":30,"props":1781,"children":1782},{},[1783],{"type":34,"value":1784},"Before the first buy:",{"type":29,"tag":416,"props":1786,"children":1787},{},[1788,1793,1798,1803,1808,1813,1818,1823,1828],{"type":29,"tag":58,"props":1789,"children":1790},{},[1791],{"type":34,"value":1792},"Funding source named, with a downside scenario modelled",{"type":29,"tag":58,"props":1794,"children":1795},{},[1796],{"type":34,"value":1797},"Program expressed as a percentage of revenue, or as a clearly bounded one-off",{"type":29,"tag":58,"props":1799,"children":1800},{},[1801],{"type":34,"value":1802},"Destination decided and documented: burn address, timelocked treasury wallet, or distribution contract",{"type":29,"tag":58,"props":1804,"children":1805},{},[1806],{"type":34,"value":1807},"Execution venues and method chosen, with an impact estimate for your intended size",{"type":29,"tag":58,"props":1809,"children":1810},{},[1811],{"type":34,"value":1812},"Calendar checked against unlocks, listings, emissions and other treasury activity",{"type":29,"tag":58,"props":1814,"children":1815},{},[1816],{"type":34,"value":1817},"Wallets labelled and disclosed so on-chain observers do not misread transfers",{"type":29,"tag":58,"props":1819,"children":1820},{},[1821],{"type":34,"value":1822},"Legal review completed for your jurisdictions",{"type":29,"tag":58,"props":1824,"children":1825},{},[1826],{"type":34,"value":1827},"Reporting format and cadence agreed in advance, including what you will report in a quarter with no buying",{"type":29,"tag":58,"props":1829,"children":1830},{},[1831],{"type":34,"value":1832},"A defined circumstance in which the program pauses, published up front",{"type":29,"tag":42,"props":1834,"children":1836},{"id":1835},"where-buybacks-and-liquidity-meet",[1837],{"type":34,"value":1838},"Where Buybacks and Liquidity Meet",{"type":29,"tag":30,"props":1840,"children":1841},{},[1842],{"type":34,"value":1843},"The recurring theme above is that a buyback is only as good as the market you execute it into. Thin books make every buy expensive and every price effect temporary. Deep, consistent two-sided liquidity makes a buyback cheaper to run, harder to front-run, and more likely to leave a durable mark on price discovery rather than a spike that fades in a week. It also gives you the data to measure what the program actually cost you in impact and spread.",{"type":29,"tag":30,"props":1845,"children":1846},{},[1847],{"type":34,"value":1848},"Fibonacci Capital works with token projects on exactly this intersection — designing liquidity that can absorb treasury activity, and executing buy programs in a way that does not hand the value to faster participants.",{"type":29,"tag":30,"props":1850,"children":1851},{},[1852,1854,1858],{"type":34,"value":1853},"If you are planning a buyback program and want to understand what it will cost to execute properly in your current market, ",{"type":29,"tag":192,"props":1855,"children":1856},{"href":674},[1857],{"type":34,"value":1246},{"type":34,"value":1859}," and we will walk through it with you.",{"title":7,"searchDepth":680,"depth":680,"links":1861},[1862,1863,1864,1865,1872,1873,1874],{"id":1282,"depth":680,"text":1285},{"id":1303,"depth":680,"text":1306},{"id":1546,"depth":680,"text":1549},{"id":1608,"depth":680,"text":1611,"children":1866},[1867,1868,1869,1870,1871],{"id":1619,"depth":686,"text":1622},{"id":1630,"depth":686,"text":1633},{"id":1649,"depth":686,"text":1652},{"id":1667,"depth":686,"text":1670},{"id":1678,"depth":686,"text":1681},{"id":1689,"depth":680,"text":1692},{"id":1776,"depth":680,"text":1779},{"id":1835,"depth":680,"text":1838},"content:blog:token-buyback-programs-guide.md","blog/token-buyback-programs-guide.md","blog/token-buyback-programs-guide",{"_path":1879,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"title":1880,"description":1881,"date":1882,"author":11,"category":12,"tags":1883,"keywords":1888,"image":1894,"readTime":1895,"body":1896,"_type":702,"_id":2424,"_source":704,"_file":2425,"_stem":2426,"_extension":707},"/blog/token-monetary-policy-supply-design","Designing Token Monetary Policy: A Tokenomics Guide","A practical guide to token monetary policy: supply models, emissions schedules, burns, and a decision framework for designing sustainable token issuance.","2026-08-18",[1884,1885,1886,1887],"token monetary policy","tokenomics design","token emissions","token supply",[1884,1889,1890,1891,1892,1893],"tokenomics design monetary policy","token emissions schedule","inflationary vs deflationary token","token supply design","token burn","/assets/images/blog/token-monetary-policy-supply-design.jpg","7 min read",{"type":26,"children":1897,"toc":2411},[1898,1904,1909,1919,1925,1930,1940,1950,1960,1970,1980,1986,1991,1996,2001,2007,2012,2045,2050,2056,2061,2094,2099,2105,2110,2116,2136,2142,2147,2153,2300,2306,2311,2316,2322,2395,2400],{"type":29,"tag":42,"props":1899,"children":1901},{"id":1900},"what-token-monetary-policy-actually-means",[1902],{"type":34,"value":1903},"What Token Monetary Policy Actually Means",{"type":29,"tag":30,"props":1905,"children":1906},{},[1907],{"type":34,"value":1908},"A token's monetary policy is the set of rules governing how supply enters and leaves circulation: how many tokens exist, how fast new ones are created, what triggers a burn, and whether those rules can change. It is narrower than tokenomics as a whole — allocation and vesting describe who holds tokens, while monetary policy describes how total supply behaves over time. For founders, this is one of the few tokenomics decisions that is genuinely hard to reverse once a token is trading, which is why it deserves its own design pass rather than a paragraph in the whitepaper.",{"type":29,"tag":30,"props":1910,"children":1911},{},[1912,1914,1918],{"type":34,"value":1913},"This guide focuses on that narrower question: supply schedules, emissions, inflation and deflation, burns, and how issuance interacts with demand as a project matures. For the broader picture of allocation, vesting, and launch mechanics, see our ",{"type":29,"tag":192,"props":1915,"children":1916},{"href":581},[1917],{"type":34,"value":584},{"type":34,"value":199},{"type":29,"tag":42,"props":1920,"children":1922},{"id":1921},"fixed-inflationary-deflationary-and-hybrid-supply-models",[1923],{"type":34,"value":1924},"Fixed, Inflationary, Deflationary, and Hybrid Supply Models",{"type":29,"tag":30,"props":1926,"children":1927},{},[1928],{"type":34,"value":1929},"Every monetary policy decision starts with what the supply curve is actually for. Each model fits a different purpose, and the common mistake is picking one because it sounds appealing rather than because it matches what the token needs to do.",{"type":29,"tag":30,"props":1931,"children":1932},{},[1933,1938],{"type":29,"tag":62,"props":1934,"children":1935},{},[1936],{"type":34,"value":1937},"Fixed supply",{"type":34,"value":1939}," caps issuance permanently. It signals scarcity and predictability, and suits tokens whose core case is store-of-value, or projects with no ongoing need to pay for network participation. Its weakness: no native mechanism to fund security, liquidity, or contributors once initial allocations run out.",{"type":29,"tag":30,"props":1941,"children":1942},{},[1943,1948],{"type":29,"tag":62,"props":1944,"children":1945},{},[1946],{"type":34,"value":1947},"Perpetual inflation",{"type":34,"value":1949}," mints new tokens indefinitely, usually to pay for an ongoing service — validator or staking rewards, liquidity incentives, continued development. This is not inherently a flaw; proof-of-stake networks rely on continuous issuance to pay for security. The tradeoff is dilution for holders who don't participate in whatever earns the new issuance.",{"type":29,"tag":30,"props":1951,"children":1952},{},[1953,1958],{"type":29,"tag":62,"props":1954,"children":1955},{},[1956],{"type":34,"value":1957},"Disinflationary",{"type":34,"value":1959}," models start with a higher emission rate that steps down on a known schedule. Bitcoin's halving is the clearest example: issuance is cut at fixed intervals until it approaches zero. This tries to bootstrap early participation while converging toward scarcity over the long run.",{"type":29,"tag":30,"props":1961,"children":1962},{},[1963,1968],{"type":29,"tag":62,"props":1964,"children":1965},{},[1966],{"type":34,"value":1967},"Deflationary",{"type":34,"value":1969}," models reduce supply over time, typically through usage-linked burns. Ethereum's EIP-1559 fee-burning mechanism is an accurate, well-known example. Deflationary policy only holds if the burn rate exceeds any issuance the protocol is simultaneously running — a burn bolted onto an inflationary model is not automatically deflationary.",{"type":29,"tag":30,"props":1971,"children":1972},{},[1973,1978],{"type":29,"tag":62,"props":1974,"children":1975},{},[1976],{"type":34,"value":1977},"Hybrid models",{"type":34,"value":1979}," combine purpose-built issuance with an offsetting usage-linked burn, aiming for supply that flexes with actual network activity. Hybrids are harder to communicate clearly, but can tie supply to real usage more tightly than either pure model.",{"type":29,"tag":42,"props":1981,"children":1983},{"id":1982},"emissions-schedules-and-front-loaded-sell-pressure",[1984],{"type":34,"value":1985},"Emissions Schedules and Front-Loaded Sell Pressure",{"type":29,"tag":30,"props":1987,"children":1988},{},[1989],{"type":34,"value":1990},"An emissions schedule is the rate at which new supply is released — from a staking reward pool, ecosystem fund, or liquidity mining program. Shape matters as much as total amount.",{"type":29,"tag":30,"props":1992,"children":1993},{},[1994],{"type":34,"value":1995},"Front-loaded schedules, where a large share of total issuance releases early, are common because they bootstrap liquidity and participation quickly. The cost is a persistent stream of new sell-side supply arriving exactly when the token has the thinnest order books and fewest natural buyers. Recipients — miners, stakers, liquidity providers — often need to sell part of what they receive to cover costs, turning the schedule into a recurring, semi-predictable source of sell pressure.",{"type":29,"tag":30,"props":1997,"children":1998},{},[1999],{"type":34,"value":2000},"A flatter or back-loaded schedule reduces early dilution but risks undersupplying the incentives needed to bootstrap a network in its first year. There is no universal answer; what matters is that the schedule is deliberately shaped, not a default output of whatever staking APR looked competitive against peers.",{"type":29,"tag":42,"props":2002,"children":2004},{"id":2003},"circulating-total-and-fully-diluted-supply",[2005],{"type":34,"value":2006},"Circulating, Total, and Fully Diluted Supply",{"type":29,"tag":30,"props":2008,"children":2009},{},[2010],{"type":34,"value":2011},"Three numbers get conflated constantly:",{"type":29,"tag":416,"props":2013,"children":2014},{},[2015,2025,2035],{"type":29,"tag":58,"props":2016,"children":2017},{},[2018,2023],{"type":29,"tag":62,"props":2019,"children":2020},{},[2021],{"type":34,"value":2022},"Circulating supply",{"type":34,"value":2024}," — tokens currently transferable and available in the market",{"type":29,"tag":58,"props":2026,"children":2027},{},[2028,2033],{"type":29,"tag":62,"props":2029,"children":2030},{},[2031],{"type":34,"value":2032},"Total supply",{"type":34,"value":2034}," — tokens that exist now, including locked or unvested tokens",{"type":29,"tag":58,"props":2036,"children":2037},{},[2038,2043],{"type":29,"tag":62,"props":2039,"children":2040},{},[2041],{"type":34,"value":2042},"Fully diluted supply",{"type":34,"value":2044}," — the maximum supply that will ever exist once all scheduled emissions and unlocks complete",{"type":29,"tag":30,"props":2046,"children":2047},{},[2048],{"type":34,"value":2049},"Fully diluted valuation (FDV) — price times fully diluted supply — is one of the most misread numbers in crypto because it treats a future state as present reality. A token with low circulating supply and a high FDV can look cheap on market cap while being expensive relative to what the market will eventually absorb. That's not a reason to hide FDV — projects that do invite worse suspicion — but founders should expect the market, and their market maker, to price in the gap between circulating and fully diluted supply.",{"type":29,"tag":42,"props":2051,"children":2053},{"id":2052},"burns-and-buybacks-policy-versus-theatre",[2054],{"type":34,"value":2055},"Burns and Buybacks: Policy Versus Theatre",{"type":29,"tag":30,"props":2057,"children":2058},{},[2059],{"type":34,"value":2060},"Burns and buybacks are popular because they're easy to announce and hard for outsiders to evaluate. Three questions separate genuine policy from marketing:",{"type":29,"tag":54,"props":2062,"children":2063},{},[2064,2074,2084],{"type":29,"tag":58,"props":2065,"children":2066},{},[2067,2072],{"type":29,"tag":62,"props":2068,"children":2069},{},[2070],{"type":34,"value":2071},"Systematic or discretionary?",{"type":34,"value":2073}," A burn tied programmatically to usage is policy. A one-time burn timed around a listing is promotion, even when the tokens are genuinely destroyed.",{"type":29,"tag":58,"props":2075,"children":2076},{},[2077,2082],{"type":29,"tag":62,"props":2078,"children":2079},{},[2080],{"type":34,"value":2081},"Funded by real activity?",{"type":34,"value":2083}," A buyback funded by protocol revenue reflects real demand. One funded from treasury reserves raised in the original sale just moves supply the project already controlled.",{"type":29,"tag":58,"props":2085,"children":2086},{},[2087,2092],{"type":29,"tag":62,"props":2088,"children":2089},{},[2090],{"type":34,"value":2091},"Material relative to emissions?",{"type":34,"value":2093}," A burn that removes a fraction of what the protocol simultaneously issues through staking or ecosystem programs barely dents net inflation. Net supply direction is what matters, not whether a burn exists.",{"type":29,"tag":30,"props":2095,"children":2096},{},[2097],{"type":34,"value":2098},"A well-designed, usage-linked burn genuinely connects token value to activity. The point is to be precise about what a given mechanism actually does to net supply before calling it deflationary.",{"type":29,"tag":42,"props":2100,"children":2102},{"id":2101},"staking-rewards-are-issuance-not-free-yield",[2103],{"type":34,"value":2104},"Staking Rewards Are Issuance, Not Free Yield",{"type":29,"tag":30,"props":2106,"children":2107},{},[2108],{"type":34,"value":2109},"Staking yield is often marketed as a return the protocol generates, but in most designs it is simply new supply distributed to participants — inflation under a friendlier name. That's not a bad design choice; paying for security or participation through issuance is common and legitimate. But it changes how yield should be described: a headline APR funded entirely by new issuance is a statement about dilution of non-stakers, not protocol profitability. Projects transparent about this distinction — issuance-funded yield versus revenue-funded yield — tend to keep more credibility with sophisticated holders and market makers.",{"type":29,"tag":42,"props":2111,"children":2113},{"id":2112},"how-unlock-cliffs-interact-with-emissions",[2114],{"type":34,"value":2115},"How Unlock Cliffs Interact With Emissions",{"type":29,"tag":30,"props":2117,"children":2118},{},[2119,2121,2127,2129,2134],{"type":34,"value":2120},"Emissions and vesting unlocks are often designed by different people at different times, which is how projects end up with a large investor or team unlock landing in the same month emissions are running at their highest rate. The market doesn't distinguish between a token sold by an unlocking investor and one sold by a staking reward recipient — both are sell-side supply on the same order book. See our guides on ",{"type":29,"tag":192,"props":2122,"children":2124},{"href":2123},"/blog/token-vesting-schedules-explained",[2125],{"type":34,"value":2126},"token vesting schedules",{"type":34,"value":2128}," and ",{"type":29,"tag":192,"props":2130,"children":2131},{"href":973},[2132],{"type":34,"value":2133},"managing sell pressure from token unlocks",{"type":34,"value":2135}," for how to structure and stagger unlocks. The monetary policy takeaway: model your emissions and unlock schedules on the same timeline before finalizing either one.",{"type":29,"tag":42,"props":2137,"children":2139},{"id":2138},"should-monetary-policy-be-changeable",[2140],{"type":34,"value":2141},"Should Monetary Policy Be Changeable?",{"type":29,"tag":30,"props":2143,"children":2144},{},[2145],{"type":34,"value":2146},"Fixed, immutable policy is easy to communicate and hard to distrust — holders know exactly what they're getting, and no one can quietly dilute them later. Governable policy lets a project correct a miscalibrated schedule or wind down emissions once they're no longer needed. The risk is concentration: if a small group controls enough votes to change issuance, \"governance\" can function as discretionary control dressed up as decentralization. If policy is adjustable, the parameters that can change, their bounds, and the process required should be specified in advance — vague governability is worse than either a hard commitment or an explicit statement that the team retains control.",{"type":29,"tag":42,"props":2148,"children":2150},{"id":2149},"supply-model-comparison",[2151],{"type":34,"value":2152},"Supply Model Comparison",{"type":29,"tag":212,"props":2154,"children":2155},{},[2156,2187],{"type":29,"tag":216,"props":2157,"children":2158},{},[2159],{"type":29,"tag":220,"props":2160,"children":2161},{},[2162,2167,2172,2177,2182],{"type":29,"tag":224,"props":2163,"children":2164},{},[2165],{"type":34,"value":2166},"Model",{"type":29,"tag":224,"props":2168,"children":2169},{},[2170],{"type":34,"value":2171},"What It Signals",{"type":29,"tag":224,"props":2173,"children":2174},{},[2175],{"type":34,"value":2176},"What It Demands",{"type":29,"tag":224,"props":2178,"children":2179},{},[2180],{"type":34,"value":2181},"Main Risk",{"type":29,"tag":224,"props":2183,"children":2184},{},[2185],{"type":34,"value":2186},"Typical Fit",{"type":29,"tag":245,"props":2188,"children":2189},{},[2190,2218,2245,2272],{"type":29,"tag":220,"props":2191,"children":2192},{},[2193,2198,2203,2208,2213],{"type":29,"tag":252,"props":2194,"children":2195},{},[2196],{"type":34,"value":2197},"Fixed cap",{"type":29,"tag":252,"props":2199,"children":2200},{},[2201],{"type":34,"value":2202},"Scarcity, predictability",{"type":29,"tag":252,"props":2204,"children":2205},{},[2206],{"type":34,"value":2207},"Funding outside new issuance for incentives/development",{"type":29,"tag":252,"props":2209,"children":2210},{},[2211],{"type":34,"value":2212},"No mechanism to fund ongoing security or growth",{"type":29,"tag":252,"props":2214,"children":2215},{},[2216],{"type":34,"value":2217},"Store-of-value assets, mature ecosystems",{"type":29,"tag":220,"props":2219,"children":2220},{},[2221,2225,2230,2235,2240],{"type":29,"tag":252,"props":2222,"children":2223},{},[2224],{"type":34,"value":1957},{"type":29,"tag":252,"props":2226,"children":2227},{},[2228],{"type":34,"value":2229},"Bootstrap now, scarcity later",{"type":29,"tag":252,"props":2231,"children":2232},{},[2233],{"type":34,"value":2234},"A credible, published schedule the market can price in",{"type":29,"tag":252,"props":2236,"children":2237},{},[2238],{"type":34,"value":2239},"Front-loaded sell pressure if early rate is too high",{"type":29,"tag":252,"props":2241,"children":2242},{},[2243],{"type":34,"value":2244},"Networks needing early participation with long-term scarcity",{"type":29,"tag":220,"props":2246,"children":2247},{},[2248,2252,2257,2262,2267],{"type":29,"tag":252,"props":2249,"children":2250},{},[2251],{"type":34,"value":1947},{"type":29,"tag":252,"props":2253,"children":2254},{},[2255],{"type":34,"value":2256},"Ongoing funding for security/incentives",{"type":29,"tag":252,"props":2258,"children":2259},{},[2260],{"type":34,"value":2261},"Clear communication that yield is issuance-funded",{"type":29,"tag":252,"props":2263,"children":2264},{},[2265],{"type":34,"value":2266},"Continuous dilution of non-participants",{"type":29,"tag":252,"props":2268,"children":2269},{},[2270],{"type":34,"value":2271},"Proof-of-stake security, sustained incentive programs",{"type":29,"tag":220,"props":2273,"children":2274},{},[2275,2280,2285,2290,2295],{"type":29,"tag":252,"props":2276,"children":2277},{},[2278],{"type":34,"value":2279},"Burn-adjusted / hybrid",{"type":29,"tag":252,"props":2281,"children":2282},{},[2283],{"type":34,"value":2284},"Supply tied to real usage",{"type":29,"tag":252,"props":2286,"children":2287},{},[2288],{"type":34,"value":2289},"Usage volume sufficient to make burns material",{"type":29,"tag":252,"props":2291,"children":2292},{},[2293],{"type":34,"value":2294},"Burns too small to offset issuance, read as theatre",{"type":29,"tag":252,"props":2296,"children":2297},{},[2298],{"type":34,"value":2299},"Fee-generating protocols with active usage",{"type":29,"tag":42,"props":2301,"children":2303},{"id":2302},"the-market-structure-consequence",[2304],{"type":34,"value":2305},"The Market-Structure Consequence",{"type":29,"tag":30,"props":2307,"children":2308},{},[2309],{"type":34,"value":2310},"Every unit of new supply released through emissions, unlocks, or reward programs eventually has to be absorbed by the order book, whether sold immediately or gradually over months. Seen this way, monetary policy design and liquidity planning are the same problem viewed from two directions. A schedule that looks reasonable on a spreadsheet can still overwhelm a thin order book if the market making behind the token wasn't built for that schedule's specific pace and timing.",{"type":29,"tag":30,"props":2312,"children":2313},{},[2314],{"type":34,"value":2315},"This is why monetary policy belongs in the same conversation as market making strategy, not downstream of it. Fibonacci Capital works with token teams to model how a given emissions and unlock schedule will interact with order book depth, so supply design and liquidity provisioning are planned together instead of reconciled after the fact.",{"type":29,"tag":42,"props":2317,"children":2319},{"id":2318},"a-decision-framework-for-token-monetary-policy-design",[2320],{"type":34,"value":2321},"A Decision Framework for Token Monetary Policy Design",{"type":29,"tag":54,"props":2323,"children":2324},{},[2325,2335,2345,2355,2365,2375,2385],{"type":29,"tag":58,"props":2326,"children":2327},{},[2328,2333],{"type":29,"tag":62,"props":2329,"children":2330},{},[2331],{"type":34,"value":2332},"What is issuance actually funding?",{"type":34,"value":2334}," Security, liquidity, contributor compensation, or nothing specific — vague issuance is the first thing to cut.",{"type":29,"tag":58,"props":2336,"children":2337},{},[2338,2343],{"type":29,"tag":62,"props":2339,"children":2340},{},[2341],{"type":34,"value":2342},"Does the emissions schedule match real need for early participation",{"type":34,"value":2344},", or was it copied from a competitor's staking APR?",{"type":29,"tag":58,"props":2346,"children":2347},{},[2348,2353],{"type":29,"tag":62,"props":2349,"children":2350},{},[2351],{"type":34,"value":2352},"Are emissions and vesting unlocks modeled on the same timeline",{"type":34,"value":2354},", so cliffs and high-emission periods don't compound?",{"type":29,"tag":58,"props":2356,"children":2357},{},[2358,2363],{"type":29,"tag":62,"props":2359,"children":2360},{},[2361],{"type":34,"value":2362},"Is any burn or buyback systematic and revenue-funded",{"type":34,"value":2364},", or a one-time event dressed as policy?",{"type":29,"tag":58,"props":2366,"children":2367},{},[2368,2373],{"type":29,"tag":62,"props":2369,"children":2370},{},[2371],{"type":34,"value":2372},"Is staking yield described accurately",{"type":34,"value":2374}," as issuance-funded dilution, revenue-funded return, or a mix?",{"type":29,"tag":58,"props":2376,"children":2377},{},[2378,2383],{"type":29,"tag":62,"props":2379,"children":2380},{},[2381],{"type":34,"value":2382},"Can monetary policy change",{"type":34,"value":2384},", and under what constraints and process?",{"type":29,"tag":58,"props":2386,"children":2387},{},[2388,2393],{"type":29,"tag":62,"props":2389,"children":2390},{},[2391],{"type":34,"value":2392},"Has the resulting schedule been shared with whoever handles market making",{"type":34,"value":2394},", so liquidity depth matches what the order book will actually need to absorb?",{"type":29,"tag":30,"props":2396,"children":2397},{},[2398],{"type":34,"value":2399},"A token's monetary policy is not a section to finalize and forget — it's a live input into how the market treats the asset for years after launch. Projects that treat it with the same rigor as their fundraising terms tend to avoid the slow, grinding sell pressure that sinks otherwise well-built tokens.",{"type":29,"tag":30,"props":2401,"children":2402},{},[2403,2405,2410],{"type":34,"value":2404},"If you're designing or reassessing your token's monetary policy and want to think through how it will interact with real market liquidity, ",{"type":29,"tag":192,"props":2406,"children":2407},{"href":674},[2408],{"type":34,"value":2409},"get in touch with Fibonacci Capital",{"type":34,"value":199},{"title":7,"searchDepth":680,"depth":680,"links":2412},[2413,2414,2415,2416,2417,2418,2419,2420,2421,2422,2423],{"id":1900,"depth":680,"text":1903},{"id":1921,"depth":680,"text":1924},{"id":1982,"depth":680,"text":1985},{"id":2003,"depth":680,"text":2006},{"id":2052,"depth":680,"text":2055},{"id":2101,"depth":680,"text":2104},{"id":2112,"depth":680,"text":2115},{"id":2138,"depth":680,"text":2141},{"id":2149,"depth":680,"text":2152},{"id":2302,"depth":680,"text":2305},{"id":2318,"depth":680,"text":2321},"content:blog:token-monetary-policy-supply-design.md","blog/token-monetary-policy-supply-design.md","blog/token-monetary-policy-supply-design",1791940654705]