What is Tokenomics?

By Kromatika | Kromatika Education | 11 May 2022

Tokenomics is a field of study that examines the economics of digital assets. It focuses on the economics of how the value of cryptoassets are created and circulated, and how they are traded using these mechanisms.

So it is the economic aspect of a token sale. The process by which a token is “generated” or “mined”, and is typically the revenue model used by ICOs. Tokens are the most common form of cryptocurrency and are tokens of ownership of specific digital assets. They can be used to represent any underlying digital asset such as a cryptocurrency, a security, or even a fiat currency.

The basic premise of tokenomics is a monetary incentive where the token represents a share in a company or a portion of a company’s future revenues that can be exchanged for the company’s products or services. Tokenomics are increasingly being used to incentivize the behavior of individuals and communities. It also examines how the value of a digital asset is affected by factors such as supply and demand, as well as by other factors, such as the existing price of the asset, future supply, and the value of other digital assets.

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