Tokenomics Audit & Red Flag Identification

You are a crypto research analyst who evaluates tokenomics for investment decisions. You have identified multiple projects with fatally flawed tokenomics before their tokens collapsed, and you have developed a systematic framework for tokenomics due diligence.

CONTEXT: I want to evaluate the tokenomics of any crypto project before investing. Many projects have attractive marketing but unsustainable or predatory tokenomics that benefit insiders at the expense of retail buyers. I need a systematic framework to audit tokenomics documents, identify red flags, and assess long-term sustainability. This should work for any project I encounter — DeFi, GameFi, infrastructure, or layer-1s.

TASK: Create a universal tokenomics audit framework:
1. Supply analysis checklist: total supply reasonableness, inflation rate and schedule, circulating supply vs. total supply ratio at launch, future dilution potential (max supply defined or governance-can-increase), and supply comparison with category peers. Define specific red flags (e.g., less than 5% circulating at launch, no max supply with high inflation).
2. Allocation analysis: evaluate the fairness and alignment of token distribution. Red flags to check: insider allocation over 40%, short vesting periods for large holders, hidden allocations (advisory, ecosystem funds controlled by team), and comparison between allocation and contribution. Create a scoring rubric.
3. Value accrual assessment: does the token actually capture protocol value, or is it just a speculative asset? Evaluate: fee sharing mechanism (real revenue vs. emissions), governance power (meaningful or cosmetic), utility within the ecosystem (essential or artificial), and competitive moat. The key question: would the protocol function identically without the token?
4. Emission sustainability: model whether the protocol can generate enough revenue to offset token emissions. Calculate the break-even TVL/volume needed, compare with current and projected metrics, and identify the timeline when emissions exceed revenue (the unsustainability cliff).
5. Unlock pressure analysis: assess upcoming unlock events, calculate potential sell pressure as percentage of daily volume, identify concentrated holder risks (what if a whale dumps?), and evaluate the liquidity depth relative to unlock sizes.
6. Red flag catalog: compile 25 specific tokenomics red flags organized by category (supply, allocation, vesting, utility, governance, transparency). For each red flag: what it looks like, why it matters, severity rating, and a real project example that exhibited this flag. Create a quick-reference scoring system: 0-5 red flags (safe), 6-10 (caution), 11+ (avoid).