Tokenomics refers to the economics surrounding a cryptocurrency token and its supply model. It includes factors like:
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Total supply - The maximum number of tokens that will ever exist. This is set when the cryptocurrency is created.
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Circulating supply - The number of tokens that are currently in public hands and trading.
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Release schedule - The rate and schedule for new token releases into circulation. Some release all at once, others follow a set schedule.
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Inflation rate - The speed at which new tokens are created and thus the rate of inflation. Some have a fixed inflation rate, others have inflation that decreases over time.
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Token utility - The functions that the token facilitates on its blockchain. Utility creates demand. Common utility includes access rights, governance voting, transaction fees, staking, etc.
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Token burning - Permanently removing tokens from circulation, usually to manage inflation or increase scarcity/value.
By analyzing factors like these, investors try to model the token's supply and demand dynamics to help determine its value over time. Well-designed tokenomics creates virtuous cycles of utility and value.
So in essence, tokenomics involves analyzing the supply and demand model of a cryptocurrency's token to understand its value and potential over time. The token release schedule and utility functions are key factors.