Definition
The economics of a cryptocurrency token, including its supply schedule, distribution, utility, incentive mechanisms, and governance structure.
Why It Matters
Tokenomics directly impacts a cryptocurrency's long-term value and sustainability. Understanding tokenomics helps investors evaluate whether a project has sound economic fundamentals.
Example
Bitcoin's tokenomics include a fixed supply of 21 million BTC and a halving event every four years that reduces the rate of new coin creation.
Related Terms
Token
Market Cap
Staking