Tokenomics refers to the study of the economics of a cryptocurrency—how its supply, distribution, utility, and incentives are structured to drive user behavior and long-term value. It’s one of the key aspects investors analyze before buying into a project.
A well-designed tokenomics model will define a fixed or deflationary supply, staking rewards, governance rights, and burn mechanisms. These elements help maintain scarcity, reward participation, and align the interests of developers and users.
Poorly structured tokenomics can lead to inflation, price dumping, or centralization of power. Projects with weak token utility or excessive team allocations often suffer from low demand and long-term trust issues among the community.
