Tokenomics Audit Checklist
DeFi Strategies • Yield Models • Token Income
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Tokenomics Audit Checklist — Evaluating Economic Soundness of Tokens
This checklist helps investors, researchers, and developers evaluate whether a token has sustainable and transparent tokenomics. It examines total supply, inflation, utility, burn mechanisms, and the fairness of distribution — all of which impact long-term value, risk, and community trust.
Use Case: This index helps filter strong, undervalued projects from unsustainable or manipulative token models.
Key Concepts:
- Emission Control — Rules governing new token creation
- Supply Cap — Limits on maximum tokens in existence
- Unlock Schedules — Timed releases for team or investor holdings
- Centralization Risk — Degree of protocol or treasury control
- Governance Exposure — How community influences tokenomics
- Tokenomics — The foundational economic model behind token supply and demand
- Tokenomics Design — The architecture layer where monetary rules are built
- Token Supply Models — Structural blueprints for inflationary, deflationary, and fixed supply
- Token Behavior Index — Companion index mapping monetary models across token types
- Token Classification System — Categorizing tokens by function, backing, and economic role
- Token Sinks — Mechanisms that permanently remove tokens from circulation
- Token Decay Awareness — Understanding how inflation and emission erode value
- Token Unlock Structures — How locked allocations release into circulating supply
- Token Vesting Models — Scheduled distribution frameworks for team and investor tokens
- Emission Sustainability — Whether reward output can persist without diluting holders
- Governance — On-chain decision-making that shapes tokenomics policy
- Supply Structure — How total and circulating supply are organized
Summary: The Tokenomics Audit Checklist is the first filter for any token position. If supply, emission, utility, and governance don’t pass scrutiny — the price is irrelevant. Audit the economics before you audit the chart.
Tokenomics Red Flag vs Green Flag Reference
quick-scan signals that separate sound economics from unsustainable models
Audit Rule: A single red flag doesn’t kill a project — but three or more in combination should disqualify it from your portfolio. Green flags compound trust. Red flags compound risk. The checklist exists to make the invisible visible before capital is deployed.
Tokenomics Audit Process Framework
a structured walkthrough for evaluating any token’s economic model
Start with total supply, circulating supply, and the gap between them. That gap represents locked, vesting, or unreleased tokens — future sell pressure. If circulating is 20% of total, 80% of the supply is coming. Check CoinGecko, block explorers, and the project whitepaper. If the data isn’t publicly available — that’s your first red flag.
How fast does new supply enter? Monthly? Per epoch? Per block? Compare emission rate against demand drivers. If the protocol mints 5% new supply per year but user growth is flat — holders are being diluted in real terms. Emission should decelerate over time or be offset by burns.
Who controls the treasury and how is it spent? DAO-governed treasuries with public voting are the gold standard. Team-controlled wallets with no transparency are the red flag standard. Track treasury outflows — if large amounts move to exchanges, insiders may be selling. Follow the money, not the roadmap.
Run the full 12-question audit. Assign pass/fail to each. If 9+ pass — the tokenomics are sound. If 6–8 pass — proceed with caution and size small. Below 6 — walk away regardless of price action. Compare against benchmarks like $BTC (fixed supply), $FLR (emission-scheduled), and $KAG/$KAU (metal-backed). The best tokenomics are the ones that don’t need defending.
Tokenomics Due Diligence Checklist
the pre-deployment audit every position deserves
☐ Total supply cap verified (or unlimited documented)
☐ Circulating vs total supply ratio calculated
☐ Emission schedule published and on-chain
☐ Burn mechanism active and trackable
☐ Net supply direction confirmed (inflation vs deflation)
☐ Supply is destiny — know the trajectory
☐ Team allocation percentage documented
☐ Vesting schedule with cliff and linear periods reviewed
☐ Investor unlock dates mapped against your hold timeline
☐ Top wallet concentration checked via block explorer
☐ No single entity controls more than 20% of supply
☐ Unlocks are scheduled sell pressure — know the dates
☐ Token required for network function (gas, staking, access)
☐ Governance rights documented and active
☐ Treasury controlled by DAO or multisig — not single wallet
☐ Revenue model sustains rewards without pure emission
☐ Community can propose and vote on tokenomics changes
☐ Utility creates demand — governance creates accountability
☐ Compared against BTC (fixed supply benchmark)
☐ Compared against $KAG/$KAU (metal-backed benchmark)
☐ Compared against FLR (emission-scheduled benchmark)
☐ Yield sustainability scored against protocol revenue
☐ Overall audit score: 9+ pass / 6–8 caution / below 6 reject
☐ Every token should earn its place against the best
Capital Rotation Map
tokenomics audit priority across market phases