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Rachel Welch

24 November 2022 157 Read Crypto

What is Tokenomics?

'Tokenomics' is the term used within the crypto industry to describe the economics of a crypto project. It is designed to provide owners and investors with an understanding of the token's value over a specified time period.The primary component of tokenomics is the supply of a crypto token. This includes the total supply and the circulating supply. A higher market cap or lower circulating supply can indicate that a token is more valuable in the future.

Another important aspect of tokenomics is utility. A token that lacks a functional use case will not have any value. However, a project that has a functional use case will have higher demand, increasing the value of its token.