Tokenomics
Tokenomics describes how a crypto token's supply, distribution, incentives, and utility are designed to influence how the token functions over time.
✦ Key Insight
Tokenomics can reveal dilution risk, concentrated ownership, incentive problems, or supply changes that may affect users and token holders. It helps readers evaluate a project beyond marketing claims and headline market capitalization.
✕ Common Misconceptions
Do not treat a low token price as evidence that a token is cheap. Check total supply, circulating supply, future unlocks, insider concentration, and whether token utility creates real demand or only temporary incentives.
Detailed Explanation
In Practice
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Circulating Supply
The number of tokens currently available to trade, excluding locked, reserved and unissued tokens.
Token
An asset created by a smart contract on an existing blockchain rather than being that blockchain's native currency.
Vesting
Vesting is a schedule that delays when allocated tokens become available to a team, investor, contributor, or other beneficiary.
Total Supply
All tokens that currently exist, including locked ones, minus any that have been burned.
Emission schedule
An emission schedule defines how and when new or previously reserved tokens are introduced into circulation.