Tokenomics = Token + Economics. It's the study of how a cryptocurrency is designed to work as money. Think of it as the "rules" that make a coin valuable (or not)!
🍕 Understanding with Pizza
Imagine there's a pizza place that creates its own "Pizza Coins" 🍕
Scenario A: Too Many Coins
The pizza place prints unlimited Pizza Coins. Everyone has millions of them!
❌ Result: Each coin becomes worthless because there's too many.
Scenario B: Just Right
The pizza place creates only 1,000 Pizza Coins and gives them to customers who buy pizza.
✅ Result: Coins are rare and valuable because supply is limited.
This is tokenomics in action! The rules about how many coins exist and how they're given out affect their value.
📊 Key Parts of Tokenomics
Total Supply
How many coins will ever exist?
Circulating Supply
How many coins are currently available to buy and sell?
Distribution
Who gets the coins and how?
Burn Rate
Are coins being destroyed to make others more valuable?
🎯 What Makes Good Tokenomics?
Scarcity can help maintain value over time
Not all coins owned by a few people
The coin actually does something useful
Everyone knows how the system works
🚨 Red Flags to Watch
They could sell everything and crash the price
More coins = less value per coin
Why does this coin need to exist?