Tokenomics

---

Assalamualaikum

---

How are you? Hope so everyone would be safe and sound this like me as I am also safe Alhamdulillah....

---

Tokenomics is my today's topic to share in which I would like to cover different points so hopefully the topic would be very easy to understand for all of you.

Source

Tokenomics is defined as study of economics and token design that are digital assets already issued at blockchain. It encompass creation, distribution, and managing of tokens and more than this their behaviors and interactions within a particular ecosystem.

Tokenomics include different aspects which includes the following;

Token supply

If I talk about the actual total amount of tokens which are created and their distribution then these are called token supply.

Tokenomics model

If I talk about design of token economic system then it includes its purpose, behavior, and incentives and is fall under category of tokenomics model.

Token utility

Token utility is defined as effectiveness and significance of token within its ecosystem.

Token value

If I talk about economic value of the token then it is mostly affected by supply and demand of market.

Token governance

If I talk about rules and decision making processes then these are significant in governing the token development and management and it is called token governance.

If tokenomics are well designed then they can lead to;

Sustainable ecosystems

Tokens are really helpful in creation of incentives for participants for contributing significant values to networks.

Fair distribution

Tokens are distributed in a most fair way for the prevention of centralization and for giving surety of community involvement.

Incentivized behavior

Tokens are helpful in encouragement of desired behaviors like validation of transactions or for providing liquidity.

Value creation

Tokens are useful for creation of new value and probability within their ecosystem.

Source

If there are poor tokenomics then they can result;

Instability

Tokens can be prone to experience extreme or high level of price fluctuations or become worthless.

Inequitable distribution

Tokens can be more concentrated in few hands which leads to centralization and significant level of manipulation.

Misaligned incentives

Tokens can be used for encouraging harmful behaviors like spamming or exploiting of network.

Tokenomics is playing it's crucial role in development of blockchain projects and it is aldo directly impactful for the viability and sustainability of ecosystem. By having a know how of tokenomics, developers, investors, and users can make more precise decisions and can show their contribution for growth of healthy and secure blockchain ecosystems.With these summarized words I would like to say goodbye to you all!

---

Thanks

---