Tokenomics

What is Tokenomics? Tokenomics, derived from the words 'token' and 'economics,' is the study of the supply, demand, distribution, and valuation of cryptocurrencies. The definition of tokenomics includes everything from the issuance and burn mechanism of a cryptocurrency to its utility and more. It is a complex and multi-disciplinary subject. Investors study tokenomics to analyze whether a token has a sustainable economic design. A cryptocurrency can lose its value over time if its supply is too high or outpaces its demand. This phenomenon is known as inflation.What is a Token?

A token is a cryptocurrency issued for a specific purpose or used as a form of exchange on a particular blockchain. It can have multiple use cases, security incentives, transaction fee payments, and governance which are central to the token’s demand.
In terms of supply, most cryptocurrency tokens have planned emission schedules coded in them. This allows investors to predict the number of tokens that will be circulating during a certain point in time. The emission rate and schedules are important factors in determining the inflation rate of a token.