This document summarizes key aspects of blockchain markets and tokenomics: 1) It discusses how blockchain enables the transfer of value through crypto-assets and smart contracts in the same way the internet enabled the transfer of information. 2) It explains that tokens can represent any asset and have properties like digital scarcity and programmability, and that tokenomics analyzes how utility tokens work. 3) It presents how ICOs have disrupted venture capital by allowing startups to fundraise through token sales on Ethereum instead of relying on private equity and debt.

1. “We trust in a Blockchain ecosystem compliant with the financial practices used at
Investment Banks, Investment Trusts and Consulting firms.”
Blockchain Global Market
Partner:

2. Blockchain Market Overview
Decentralized Application
Infrastructure
Crypto-currency

3. Internet of Value
 Internet: ability to transfer information
 Blockchain : ability to transfer value
Crypto-asset:
• Digital scarcity
• Trust less system (no trusted third party)
Smart contract (Ethereum):
• Programmable asset
• Asset issuance on top of an existing protocol
Tokens can represent any asset, from financial security to a voucher for a good or
service.

4. Tokens as a new asset class
Token value is tied to what it represents, Tokenomics refers to the analysis of utility tokens.

5. Venture Capital Democratization
Start-up Definition, Damoradan (2009) :
« No history…, small or no revenues, operating losses … dependent on private equity … many don’t
survive ».
Dilution Repayment Interest Dividend
Equity Yes No No Yes
Debt No Yes Yes No
Mezzanine Yes Yes Yes Yes
Token No No No No
A new financial paradign
• Ethereum’s ERC20 Token put a stop on the Private Equity & Venture Capital monopoly for
start-up financing
• Token Sales or ICOs should be viewed as a disruptive fundraising mechanism taking
advantage of the Blockchain Technology to fund start-ups
5

6. ICO journey
Choice of jurisdiction
Legal considerations
Utility token design
Services:
Consulting
Legal review
Token Model
Token economy
Sale mechanism
Visuals
Services:
Consulting
Visual content
Roadshow
Marketing
Video presentation
Services:
CM
Public relation
Event organization
Video content
Investor relation
• VC – Crypto Fund
• family offices
• Business Angels
Services:
Due diligence
Investors relations
Social network
Marketing campaign
Smart contracts
Services:
KYC/AML provider
Custodianship
Smart contract audit
CM
Listing on exchanges
Liquidity to token
buyers
Services:
Consulting
Market making
Exchange
Cash-out
Pre-sale Crowdsale Post-ICOFeasibility White paper Communication
Our philosophy is to work with ICO entrepreneur at each step of the ICO process : designing
the token model (Pre-ICO) providing Research report for professional investors (Pre-sale) and
ensuring liquidity on crypto-exchanges (Post-ICO)

7. The crypto bubble
How financial innovation causes bubbles, Thomson Reuters, 2010:
“Financial innovation, on this view, is in large part the art of turning illiquid
assets into liquid assets. And once an asset is liquid, it’s susceptible to highly-
dangerous booms and busts.”
Speculative
Bubble
Innovation Liquidity
Information
Asymmetry

8. Tokenomics for ICOs
Monetary
Economics
A Token is
currency into
an ecosystem
Tokenomics
Game Theory
Incentives are the
core of Token
Model Design
Valuation
ICO funding is a
fundraising
operation by
nature
Market Finance
Tokens are liquid
and tradable on
exchanges
Pre-ICO
• Ecosystem building
• Mechanism design
• Token metrics
ICO
• Market sizing
• Financial modeling
Post-ICO
• Liquidity
• Market watch

9. Token Model Design
9
Ecosystem design
• Identifying the network’s participants (e.g. users, miners, suppliers of good/service, the
platform)
• Understanding the interactions between the participants (e.g. voting, staking, mining,
buying, leasing, verifying, rewarding)
Mechanism design
• Rewarding mechanism to encourage healthy behaviors
• Encouraging long term holding
Token metrics
• Price per token
• Market Capitalization
• Total supply / Circulating supply

10. Market Sizing & Token Valuation
10
For most decentralized applications, the token act as an internal currency. Hence, Quantity
Theory of Money is the best tool to model the token ecosystem value:
M = P * Q / V with:
• M is the total supply (in USD) (it is the fundamental value of the market cap)
• V is the Velocity (per year)
• P is the price of the service offered (in USD)
• Q is the Quantity (per year)
A token can have several features representing interaction between stakeholders, each feature is
tied to a specific fundamental value.
Let’s say a token is used to buy a good and to access a service. The fundamental market cap of
the token is the sum of the two features which have independent fundamental market cap.

11. Supply & Demand
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Supply drivers:
• ICO buyers
• Rewarding
• Network participants receiving Tokens as a medium of payment
Demand drivers:
• Organic demand
• Speculative demand
The need for liquidity:
• Price stability
• Bid / Ask spread
• Depth of market

12. Tokencapitalmarket.com
Reyan.lamrani@tokencapitalmarket.com
Abdelhalim.ouadah@tokencapitalmarket.com
@TheTokenomist