Understand the basics of Tokenomics: a key to the success of the cryptocurrency
The world of cryptocurrencies has exploded in recent years, with new pieces and tokens that emerge every day. Basically, cryptocurrency is a digital or virtual currency that uses security encryption and is decentralized, which means that it is not controlled by any government or financial institution. Tokenomic is a crucial component of any cryptocurrency ecosystem, the study of the economy and the distribution of tokens in a blockchain based on the system.
What is tokenomics?
Tokenomic refers to the mathematical modeling of the token economy, which includes various aspects of the design, offer, use and behavior of a token. It is a question of analyzing how they are created, distributed and exchanged tokens in a blockchain network. By understanding tokenomics, developers, investors and market operators they can better understand the implications of their decisions on the ecosystem as a whole.
Supply of token
A fundamental concept in tokenomics is the token offer. This refers to the total quantity of token that will exist at the beginning of the project. The tokens offer determines the price of each token, which in turn affects its demand and its market value. A large token offer can cause inflationary pressure, reducing the value of a single token.
There are three types of token.
- Fixed supply : At this moment a specific amount of token is created at the beginning of the project.
- Avestation chain: tokens can have an acquisition calendar, which means that investors can only buy or keep certain tokens for a defined period before they are available to be negotiated.
- Burning protocol : In some cases, tokens can have an ongoing combustion protocol, in which excess tokens are destroyed to maintain the supply of token.
Food in the circulation of token
The offer in circulation is the amount of token that exist outside the reserves or sales of the treasure. This can affect market volatility and the feeling of investors when negotiating a particular token.
The circulation of tokens generally includes:
- Riserva : token detained by developers, founders or treasure for future use.
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Distribution of token
The distribution of token is another crucial aspect of the tokenomic. This refers to how new tokens are created and distributed in the ecosystem. The distribution model can influence:
- Inflationary pressure : Token’s excessive creation can cause inflation, reducing the value of a single token.
- MARKET FEE : Retus tokens or that have a higher demand can be able to order higher prices.
Use of token
The use of token is another essential aspect of the tokenomic. This refers to how tokens are used in the ecosystem and their potential impact on market dynamics.
Token can be used for various purposes, including:
- Exchange costs : tokens can be used to pay exchange costs.
- Transaction costs : tokens can be used to pay the transaction costs.
- calls intelligent contracts : tokens can be used as a entry for intelligent contracts, which perform specific actions on the blockchain.
Token models
There are several token distribution models that can influence the token economy of a project:
- Public sale : owner vehicles must buy tokens at market prices when available.
- Private sale
: Token owners receive token at reduced prices before public sale.
- Lot : the tokens are purchased in large lots to check their price and their offer.
mechanisms for the token distribution
Some projects use token distribution mechanisms to manage tokens:
- Taken exchange: token owners can exchange one token with another to buy more.
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