While looking through socials, I managed to find out about the tokenomics of HyperCycle (https://medium.com/hypercycle/introducing-hypercycle-a-layer-0-blockchain-architecture-optimised-for-scalable-ai-microservices-15c2d16b2fef#:~:text=HyperCycle%20Tokenomics)
The breakdown for the token allocations are as follows:
- 28.73% for Ecosystem Network Adoption Fund
- 22% Network Incentive Fund
- 20% Liquidity Rewards Pool
- 15% Team & Advisors
- 5.75% Strategic Partners
- 4.3% Private & Community Round
- 2.95% Seed Round
- 0.75% Public Distribution
- 0.52% Launchpads & KOLs
This essentially means that the project has ~71% of token allocations provided for incentives (Network Adoption Fund, Incentive Fund, Liquidity Rewards), ~20% for Team & Advisors and Strategic Partners, and ~9% for the rest. I am not particularly comfortable with 20% for Team, Advisors & Partners as it easily represents significant selling pressure.
With their vesting schedule, whilst the team, advisors and partners have a 30 month vesting period, they are only cliffed for 6 months, with vest monthly periodicity. This would mean that 14853428.6 of "free" tokens are unlocked every month, even at seed price of $0.0332 that would be $493k of potential selling pressure per month. Personally it does not provide a strong commitment to the project by the team.
Seed, Private, Community and Launchpad KOLs have daily claim for vesting post 3 months (6 for Seed), seed investors currently have almost 10x with their initial price at $0.0340 and current price at $0.282. Daily unlocks might have strong selling pressure for the tokens post cliff.
As someone who missed out on previous sales, the tokenomics may seem "predatory" as purchases are met with strong selling pressure every step of the way.
Edit: Running a Node also further unlocks the value of the tokens, having to purchase a Node license for $96 to be "eligible" to run a node. With node licenses working as NFTs, this also provides a potential secondary marketplace for users to secure more nodes if required. In order to run a Node for HyperCycle, 1024 $HYPC is needed as a Parent Node (currently costing ~$289), which can then be used to build "child nodes" and allows the user to collect rewards for parent and child nodes. This reminds me of a Validator pool and allows smaller users to join the parent validator, earning rewards and greatly reduces the cost to entry.
For transaction fees, running nodes enables rewards to be earned via various other tokens which is interesting - most platforms for staking/LPing provides rewards in native tokens or LP-ed tokens.
Lastly, they also make use of a "leveling system" via Network Contribution Score, with increased Scores allowing the running of more nodes, further branching the parent and child nodes. This is extremely interesting for value accrual as well as the maintenance of the network as it grows larger. Show Less
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