Tokenomics

Tokenomics is the collection of economic rules and parameters governing the creation, distribution, circulation, and use of a cryptoasset.

Tokenomics describes where an asset supply comes from, who receives it, how quickly new units enter circulation, and what mechanisms can increase or reduce available supply.

Key tokenomics parameters

• total supply — total units created;
• max supply — maximum supply when one exists;
• circulating supply — units considered to be in circulation;
• emission — creation of new units;
• token burn — removal of units from available supply;
• allocation among users, teams, investors, and treasuries;
• vesting and token unlock schedules.

Why tokenomics matters

The economic model influences potential changes in supply and the incentives of network participants. For example, a large allocation held by a team or early investors can result in future changes to available supply when those tokens become unlocked.

Tokenomics does not directly determine an asset price. Market value also depends on demand, liquidity, utility, adoption, and broader market conditions.