[List] Ethereum and other smart contract L1s: How fair are tokenomics & launch?

[d5000]

I am investigating the tokenomics and launches of the so-called Ethereum killers, i.e. layer-1 blockchains with turing-complete smart contract capability.

The question is: how fair are these coins regarding the distribution of their initial supply?

I have developed a simple score for launch fairness. The higher the score, the less fair I consider (personally) the coin distribution. The score is composed of the following indicators:

- C: Coin supply after 1 year
- F: Founders/Developers allocation, as % of C
- I: ICO & Seed investment, as a percentage of C
- E: Ecosystem, as a percentage of C
- D: Developer fee subtracted from block reward. If present, then the score is duplicated, because this means a continuos dilution. Only applies if the developer fee is mandatory/hard-coded. If the tax goes to a DAO or another structure with minority founder participation, the score is multiplied with 1.5.

The formula of the score is: ((F * 2) + I + E) * (2*D). That means that founders' reward has double weight.

I will start with the top Ethereum-style coins (those in the top 15), including Ethereum itself. Depending on interest, but very likely even if the interest is limited, I'll add more coins regularly. Company coins, like BNB, will be ignored. Coins with a higher score than Ethereum will be marked in RED, coins with lower score GREEN, and those very close to Ethereum's score (around +-10%) BLACK.

Those who like can propose other coins. Above all I'd be interested in coins with especially fair tokenomics, i.e. with a low score. Also if I made an error anywhere, I'm thankful for corrections & feedback!

Sources are: Cryptorank, ICOdrops, Coingecko. (In several cases I had to calculate the coins allocated in each founding round or to the team/foundation, so it's possible I made errors.)

(Last update: 2024-08-17: Added Tezos/XTZ.)

German Thread


Ethereum (ETH)

• Supply after 1 year: ~77M
• Founders' allocation: 11.9M
• ICO/Seed investment: 60M
• Developer fee: NO
• Score: 1.08 ((11.9M * 2) + 60M) / 77M

Solana (SOL)

• Supply after 1 year: ~260M (2021-04-10)
• Founders' allocation: ~66M
• ICO/Seed investment: ~188M
• Developer fee: 0
• Score: 1.2 ((66M * 2) + 180M) / 260M

Toncoin (TON)

• Supply after 1 year: (no data)
• Founders' allocation: (no data)
• ICO/Seed investment: (no data)
• Developer fee: 0
• Score: NO SCORE YET  

Note: TONcoin was distributed via a quite intransparent process (Gram token ICO, testnet tokens) and it's difficult to obtain exact data, it's also not clear what exactly can be considered the launch date. If someone has good data you can post them (with sources, of course).

Cardano (ADA)

• Supply after 1 year: 32.6B
• Founders' allocation: 5.15B 5.05
• ICO/Seed investment: 25.84B 25.9
• Developer fee: 0
• Score: 1.108  ((5.15 * 2) + 25.84) / 32.6

Note: One year after the launch Cardano mainnet was still not fully functional, so validation rewards had not been paid out yet.
Note 08-05: Recalculated with Coingecko data. Score is only very slightly higher.

Tron (TRX)

• Supply after 1 year: -
• Founders' allocation: 34%
• ICO/Seed investment: 66%
• Developer fee: 0
• Score: 1.34  (0.34 * 2) + 0.66

Note: Original allocation percentages were taken as the launch was as a token, so circulating supply wasn't taken into account.

Avalanche (AVAX)

• Supply after 1 year: ~220M
• Founders' allocation: 65M
• ICO/Seed investment: 104.2M
• Developer fee: 0
• Score: 1.06  ((65 * 2) + 104.2) / 220

Polkadot (DOT)

• Total supply after 1 year: ~1.1B
• Founders' allocation: 300M
• ICO/Seed investment: 650M
• Developer fee: DAO FEE
• Score: 1.70  1.5 * ((300 * 2) + 650) / 1100

See Notes in post below.

NEAR Protocol (NEAR)

• Total supply after 1 year: ~1.1B
• Founders' allocation: 354M
• ICO/Seed investment + Ecosystem: 473M
• Developer fee: NO
• Score: 1.18 ((354 * 2) + 473) / 1100

See Notes in post below.

Ethereum Classic (ETC)

As Ethereum Classic shared the launch with Ethereum, its score is exactly the same: 1.08.

Internet Computer (ICP)

• Total supply after 1 year: 481M
• Founders' allocation: 214M
• ICO/Seed investment + Ecosystem: 216M
• Developer fee: NO
• Score: 1.33 ((214 * 2) + 216) / 481

Tezos (XTZ)

• Total supply after 1 year: 804M
• Founders' allocation: 152M
• ICO/Seed investment + Ecosystem: 610M
• Developer fee: NO
• Score: 1.13 ((152 * 2) + 610) / 804

See notes in post below.


Important: This is a personal opinion and not investment advice. In the case of a bad score it is still possible that a project is good to invest in, if it's transparently and responsibly managed. It is possible that it cointains errors, mainly because the projects aren't exactly eager to communicate their premine tokenomics transparently and often I had to calculate the proportions between the premine categories myself. In the case you discovered an error, please comment in this thread.

[nullCoiner]

great idea, had immediately asked myself about ADA, can't wait for i.e. Tezos I'm happy that Avalanche has the lowest score so far. I'm sure it won't always be easy to find the data. What is also important in my opinion is whether there is a max supply or “someone” can mine new coins at any time, I don't want to start a fundamental discussion here, but maybe a hint or factor would be good.

[betswift]

Thanks for such an interesting post! I will look for updates or discussions from time to time. Or maybe try to search for data about TON, as it's on the ears lately.

[d5000]

I added Polkadot and NEAR and also mentioned ETC (which has the same score than ETH).

Notes for Polkadot:

Polkadot had two private sale rounds after launch with about 83M tokens distributed this way, and there are also undisclosed rounds ("Future Sales"). These are included in the "I" figure.

Polkadot has a "Treasury" fee. This fee doesn't go directly to the founders but the expenditures are voted by a DAO. I apply a 1.5 factor for this "DAO treasury tax" instead of 2 for a full-fledged dev fee (see explanation below).

Notes for NEAR:

There is a category in the initial allocation which could be evaluated differently called Community Grants, Programs (170M). I chose for now to not include the Community Grants into the score, even if the Community Grants in other coins may be one of the tasks of a "Foundation".

Next round will be ICP (Internet Computer) and, per suggestion by nullCoiner, Tezos (TZ) even if it's much lower on the Coingecko/Coinmarketcap rankings.


I made also two small additions to the score:

First, there is a new category called "Ecosystem", which gets the same weight than ICO/Private Sales, if present. These are funds which are paid to external developers to develop applications for the coin. As these funds are separated from the founders' and Foundations' allocations, they can be described like a "barter" ("work for coins"), so they're a bit similar to a Private Sale.

Second, the Developer/Treasury fees can have the value of 2 (like originally), when the fee is allocated directly to the founders or the foundation or 1.5 if it's allocated to a DAO where the participation of the founders is minoritary.

There were some suggestions in the German forum to change the score to "normalized" values between 0 and 1. I'm considering that but I have to think about how to implement the weights and the "penalty" for dev fees correctly.

[d5000]

Added Tezos. It is further down the rankings than some other chains (currently at #101 at Coingecko), but it was desired by user @nullCoiner.

Tezos had a fairly standard distribution: 80% of the initial supply was ICO (and a very small private sale), 10% went to the Foundation and 10% to a company called Dynamic Ledger Solutions (Source: Tezos Tokenomics explained and CryptoRank).

As so often, neither the Tezos website nor the most popular block explorers provide a transparent chart for the total supply. So as in some other coins already I calculated the supply dividing the market cap at Coingecko one year after launch by the price at that moment. This method is error prone but I'm also not providing a very fine grained index here, and the number of 804 million XTZ looks reasonable for 2019 taking into account the current supply is slightly above 1 billion.

Tezos score seems to be standard so far, only slightly above Ethereum.