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Rachel Welch

06 November 2022 152 Read Blockchain

What is Tokenomics in Blockchain?

Tokenomics is a crucial part of a blockchain platform. It is an incentive mechanism that incentivizes users to participate in the network. For example, the bitcoin network has an elegant incentive model. In addition, the Proof of Stake mechanism is becoming more popular, allowing participants to lock their tokens to validate transactions. This incentivizes users to act honestly, which helps maintain a robust protocol.

Tokenomics takes into account several factors, including how each token is used. First, it is important to understand what kind of services a token can be used for. For instance, if a platform is growing, its users may want to buy tokens to support its development. These purchases and usage can ultimately boost the price of the tokens.