Tokenomics determines a project's long-term viability. Here's how to analyze it.
What is Tokenomics?
Tokenomics combines 'token' and 'economics.' It's the study of how tokens are designed, distributed, and used within an ecosystem.
Key Factors to Analyze
Supply
- Total supply: Maximum tokens ever
- Circulating supply: Currently available
- Inflation rate: New tokens per year
Distribution
- Team allocation (%)
- Investor allocation (%)
- Community/Public sale (%)
- Treasury/Ecosystem (%)
Vesting
When can insiders sell? Long vesting = aligned incentives.
Utility
- What is the token used for?
- Is usage required or optional?
- Does usage drive demand?
Red Flags
- High team allocation (>20%)
- Short vesting periods
- No real utility
- Unlimited supply without burns