Reading the whitepaper and drawing conclusions from the TomClicker example.
Hi, friends!
In order not to make the channel look overtly promotional (after all, that was not its primary purpose), I want to make a few articles on the topic of choosing interesting projects and how you can identify a good project at an early stage.
Of course, you can just look at the list of investors and follow the big funds, but the true diamonds (which are inadvertently self-funded) may pass by in this way.
In the context of getting project tokens for free via airdrop’s and mining applications, the ability to figure out good projects is also a useful skill, as it gives you the knowledge of whether you should hold on to the project tokens until a better price, or dump them immediately upon receipt.
And one of the ways is to read the main public document of any project — Whitepaper.
Whitepaper is essentially an extract, the essence of the project. Describing what it is, how it will be financed, and how it plans to develop. The absence of a whitepaper is not a verdict, just its presence is a huge plus for developers for transparency.
Today, on the example of TomClicker whitepaper, we will see what is worth paying attention to and why I personally believe that the project will take off.
TomClicker has a rather compact whitepaper with the maximum amount of useful information per unit of text, which looks very good, as there is a long-standing trend in cryptocurrency to make this document as large, tedious and hard to read for the average person. But even the variant that TomClicker has is quite voluminous, so we will focus on the most important points.
The first important point is to make sure you read what the application itself is. In other projects, you may see the acronym CGA, or Community Growth Application. Unless there is a clear reward for users, you are not guaranteed a reward for participation. TomClicker explicitly states that it is a game that has prizes in the form of $TOM tokens distributed based on your place on the leaderboard.
It also promises mini-games in the future, which (my guess) can be used to recycle excess tokens.
Naturally, the main thing we care about now is how the Airdrop of $TOM tokens will take place, so we go to the corresponding section.
And then we see an important point — Airdrop will be distributed by seasons. That is, if we did not manage to take a good place in the first season, we can always try in the second season.
There is also a definition of the leaderboard system. The points gained in the game are not tokens, but a means of scoring. If you have earned 10 million TOM POINT and another player has earned 9 million, depending on the leaderboard you can get many times more than him (if for example between 9 and 10 million 40–50% of the other players are between 9 and 10 million).
Also prescribed ways to get TOM POINT’s. Clicks, autofarming with improvements, completing tasks, inviting friends.
Some other projects may include onchain activity, which is clearly not “unfair play”, but still puts in a different position those who can spend cryptocurrency on such tasks and those who can not.
We have gotten to the most important thing — tokenomics.
Here are the main points of how the project will earn and spend, as well as how you can earn. Let’s analyze each point.
Total supply — the maximum number of tokens that will be issued. TOM has 1 billion tokens. It’s quite a lot, but not too much. For distribution to a large number of people, it’s just right.
Seed — How many tokens will be sold to primary investors. Often these funds are used for further development of the project, so the number is very important. In fact, it determines how many tokens at the minimum price will be allocated to large holders who can significantly influence the price. If the value is more than 50%, you should already be wary. TomClicker’s value is 25%, which is more than the standard 10–15% and most likely indicates the need to receive investment for development (for self-funded projects the price is absolutely normal).
IDO — How many tokens will be used for further sale. In fact, a second chance for those who missed the Seed-round of sales, but now the project is interested and ready to invest. Usually the percentage of tokens going to IDO is not too big.
Airdrops — Actually, the number of tokens that will be distributed to users during any events. For a token betting on community, a large value is a good thing. TomClicker has an almost perfect value of 30%, meaning 300,000,000 TOM will be handed out during Airdrops.
Liquidity — Percentage of tokens going to support liquidity. That is, these are the tokens that will be added to support trading on exchanges. Large values are rare here, usually 10–15% of the total volume is enough. Also, this parameter can sometimes hide the value of REVENUE from tokens, which will be sent to support liquidity.
Team and Advisors — Percentage of tokens going directly to the team. As simple as possible. Too big or too small percentage in this column should alert you. Except for self-funded projects, which are very self-reliant. They may have an extremely low percentage of IDO/SEED and a high percentage of team. Everything is logical — if you use your own funds for development, you expect to be able to compensate them. TomClicker has a pretty standard 15%, which in my opinion is low for a project that was originally developed with its own funds.
Marketing — Percentage used for marketing and advertising purposes. This can be payment for advertising, a contract with a marketing agency, or even the banal distribution of tokens to bloggers. Usually this percentage is quite high, as attracting new users is a costly endeavor. But TomClicker has a relatively low one. Why? The answer is quite simple. Clickers are now on a wave of hype and do not need so much to chase new users — they come themselves. But for projects of other topics, a low percentage of marketing costs can cause distrust of investors. Banal “How will they know about you then with such low advertising and marketing costs?”.
Here we already have a scheme of token distribution after TGE.
TGE — Token Generation Event. Time of token creation. In recent times it means the moment when tokens begin to be distributed among users. It doesn’t matter whether they are transferred to investors or distributed using airdrop, as soon as tokens start moving from the project wallets, it is considered TGE.
Since all projects have different values and it is often impossible to determine exactly why certain values are chosen, let’s just analyze TomClicker’s values.
Seed/IDO — 20% (from the previously mentioned 25%+5%) is distributed immediately, another 2.5% is unlocked every week. That is, 100% of funds received by investors will be in their hands in 16 weeks after TGE. This is an average value. But for a game project it is absolutely normal. Long unlocking of funds is most often found in projects in development (also, long-term) and is aimed at keeping investors from wanting to spit and dump all their funds on the stock exchange. Long unlocking is also found in scam projects masquerading as long-term projects.
Airdrops — 30% + 2.5% per week. Very strange value. Unlocking funds in airdrops is usually not used. But okay, maybe it’s a feature of smart contract operation. As a result, TomClicker will have 90,000,000 TOM tokens unlocked at the time of TGE, the remaining 210,000,000 will be gradually unlocked over 15 weeks.
Liquidity — 100% will be available immediately with TGE. Completely logical solution. The blocking of liquidity funds should be done on liquidity pools, not with a smart contract.
Team and Advisors — 6 months of blocking funds, further 2.5% per week. Blocking funds for a team for a certain period of time is a good tone. I wouldn’t say that it can’t be bypassed if you want to, but there is a little more trust in teams that lock in team funds for a period of time.
Marketing — 20% will be available immediately, then 5% per week. Also a logical move. 100% of the budget for marketing, in the case of promotion clicker, which are now on a wave of hype, is simply not necessary. But in a couple of months, when the initial excitement begins to subside, quite useful.
A little advice — pay attention to projects with 100% TGE marketing budget. They may be counting on quick attention, with no plans for further growth. As you realize, this is a blatant red flag.
Tax
I would call it “trading fees”. Every time a TOM token is traded, a fee will be taken from the sale.
1% — Goes to the buy-back-and-burn system. Roughly speaking, the number of tokens will gradually decrease with each sale. To maintain the price of the thing is interesting, but the impact will not be immediate.
0.5% — Maintaining liquidity. To me, this is a clear over-insurance. If the price goes down (that is, if users in large numbers decide to dump the token), this percentage will not help in any way, and the above system is enough for simple holding.
2.5% — Marketing and team development. Quite justified percentage, provided that the hype on clickers will gradually decline.
Very tasty whitepaper item. Possible use of TOM tokens.
- Use of token for seasonal rewards. The actual distribution of airdrop’s.
- In-game purchases. An interesting item for user retention. In the first season there will be no such opportunity, but in the second season, old users will have a choice — to sell their TOM tokens or spend them on improvements with a chance to get more. The thing is interesting, but requires a good understanding of the balance. If these improvements will have a VERY strong impact on the process — new users won’t understand, if weak — they won’t be used. Hopefully the team knows what they are doing.
- In-app ad buying. Similar to NOTCOIN. The app has a large audience, so you can give targeted ads for tokens. A good way to pump up your channel for season 1 winners, by the way.
- HODL. Hold to the best price. I will not even comment =)
Also, the developers write that there are many more opportunities to use the token, but now, the above are the ones that will be 100%.
The roadmap of the project. Where it is developing and how long it plans to reach certain goals.
I advise you to always pay attention to such events as Airdrop launches (for obvious reasons), the launch of SEED sales rounds, IDOs and listings on exchanges. These are the things that directly affect the receipt and price of a token.
And TomClicker is not doing so well here, alas. Let’s omit the point that two goals were not achieved in March. They are related to partnerships and integration of web3-features into the application, so they are interesting but not critical.
But the lack of listing plans on exchanges (even tentative) is very discouraging. There is not necessarily a need to designate a specific exchange, but when it is planned to list at least somewhere — it is very necessary. Because otherwise the question arises — “Will your token be traded at all?”.
I hope that this is just an oversight, because in other items of the whitepaper the possibility of trading is specified as clearly as possible.
Absolutely all teams in all crypto projects I’ve seen fall into three categories.
- Full-fledged. Developer faces, Linkedin links, Twitter/Facebooks, family instagrams, portfolios, sanity certificates, feedback from neighbors. Anything you can think of to confirm that these are real people with actual experience.
- Almost full-fledged. Photos with captions. Occasional links to nearly blank Linkedin profiles. I often find links to half-empty Github accounts. The meaning of the latter is frankly unclear to me.
- Anonymous. Pictures with captions. Sometimes it’s interesting to look at, but it doesn’t give me any opinion about the team. Reasons for use? Thousands of them.
The important thing when choosing a cryptocurrency project is to realize that even a fully prescribed team, whose members have not taken selfies with their passports, does not guarantee success. And even the chance of scam it reduces quite slightly. Since no one will guarantee that the developers mentioned in the whitepaper are the same people in the photo. Or even that these people exist at all, and not that in front of you is a well-made fake.
Therefore, in the case of free entry into the project (mining in telegram, airdrops, etc.) — the description of the team can simply ignore.
For IDO participants, I advise you to look at who participated in the Seed round, whether there are large investors or funds. Since the team concludes a contract with them personally, and, in fact, these investors and funds check them independently, for you.
There are many more items in the tokenomics that tell about future features, mini-games, changes in mechanics and other things. There is no point in analyzing them in detail, you can look at them yourself.
The important point for me is that they are there. The difference of a good project is that a good project tries to provide maximum data about itself to its users. It does not hide information, but on the contrary tries to show “Look what we have invented, isn’t it cool?”. It’s great to have that. Conversely, I’m wary if all the information in the whitepaper revolves around “look at the numbers, this is how much you can get if you buy it”.
Fortunately, TomClicker has the former option. I really wish the developers success and hope they succeed. Because according to my personal assessment, the project and the whitepaper are quite adequate, not without issues, of course, but there are no red flags.
P.S. If you liked the article, please write whether it is worth writing similar ones for other projects.
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Projects I participate in (mostly related to mining in telegram and airdrop). There are articles about most of them in my profile.
