Tokenomics—short for token economics—refers to the design and structure of a cryptocurrency’s economic system. It defines how a token is created, distributed, and managed within its ecosystem, influencing both value and user behavior.
Key elements include supply dynamics (total, circulating, and inflationary or deflationary mechanisms), distribution models (founders, investors, community rewards), and utility—how the token is used for governance, staking, payments, or access to services. Tokenomics also covers incentive structures, determining how participants are motivated to contribute liquidity, secure the network, or promote long-term sustainability.
A well-designed tokenomic model aligns the interests of users, investors, and developers, ensuring the project’s economic viability and resilience over time.