Blockchain is a wonderland for many believers. It could potentially open up a magical door to a new world, where everything is fair and transparent. In this world, everyone will believe in one another, as data are owned by every single participant and smart contracts execute everything in a fair and logical manner. However, this seemed-to-be beautiful place has its pits as reality kicks in – there are dead projects. For that reason, if anyone wants to start investing in new promising blockchain projects, it is extremely important to analyze the project with caution.
Vesting is the process of locking/unlocking tokens for a specific amount of time.
So far, there are two ways to vest tokens: Linear Vesting and Twisted Vesting. For linear vesting, the tokens will be released as equal portions periodically (E.g: daily, weekly, monthly, yearly). For twisted vesting, the tokens will be released randomly (first 3 months 45%, next 1 month 10%, next 3 days 10%,…).
Vesting is critical to any blockchain project because this process often applies to the contributors that help build the project (founders, advisors, designers, stakeholders,…). A good vesting schedule shows that the team is committed to building the project.
In Vietnamese, there is a saying “Hoc di doi voi hanh”, which means learning comes with practice. In my opinion, to better understand any problems, it is important to show examples. Therefore, I will show you how to analyze a project’s vesting schedule using the example of Heroverse(HER), one of the iconic blockchain gaming projects.
You will need to open an Excel Sheet to follow this exercise. Excel Sheet makes it easier to summarize the vesting schedule.
Firstly, you can find all related images and content of Heroverse in my blog from http://heroverse.io
Open your blank Excel Sheet, we will go through the analysis step by step. Fill in your Excel every step of the way for better understanding.
1) Project Introduction
Please read the project introduction, at least you will need to know what the project is all about. Trust me, your acknowledgment of the project means the world to blockchain project creators like us. And if you think about the project, it means the decentralized world to all of us!
Here are the tokenomics announced by Heroverese
From the image, we can see that the total supply of this project is 1,000,000,000 HER.
Hardcap = all sales made by the team in an effort to raise funds for the project.
3) Token Allocation
Based on the information retrieved from Tokenomics and Token Allocation, we now know precisely how the team allocates their total supply
4) Vesting Schedule
Note that for some projects, they usually show information separately. If you cannot see the vesting schedule clearly and thoroughly, you will be missing out on some heavy inflation periods. You will see this better as we dig deeper, so sit tight!
Let’s take the example of Team & Advisor. Heroverse declares a 6-month fully locked, this is called Cliff. After this cliff period, the tokens will either be fully unlocked, linear vesting or twisted vesting. Here, after the 6 months cliff, Heroverse uses Linear Vesting for the tokens throughout the period of 18 months. This means that these tokens will be divided to 18 equal parts, and for the next 18 months, the tokens will be released equally monthly.
Monthly unlocked amount = total no. tokens / no. months
TGE = Token Generating Event – the event in which 2 purposes are served, when a token is:
As you can see, for this project, after every month there will be an unlocked amount of tokens added to the circulating supply. With the Excel Sheet, now you can calculate the inflation rate from the monthly added tokens
Inflation rate = (circulating supply month x – circulating supply previous month ) / circulating supply previous month
I hope you learned something today 🙂 See you in the next blog!