Definition
Tokenomics encompasses all economic aspects of a crypto token: total supply, inflation/deflation mechanics, distribution (team, investors, community), vesting schedules, utility within the protocol, and governance rights. Good tokenomics align incentives between users, developers, and investors. Key metrics include circulating supply, fully diluted valuation, and emission schedule.
lightbulb Example
Token X has 100M circulating supply (of 1B total), priced at $10. Market cap = $1B, but FDV = $10B. If 500M tokens vest to the team over 2 years, significant sell pressure is expected—the apparent $1B market cap understates the $10B future supply overhang.
verified_user Key Points
- Economic design of a crypto token
- Supply, distribution, utility, and governance
- FDV vs market cap reveals future dilution
- Token emission schedule affects price pressure