Tokenomics News

Tokenomics is the science of a token economy, encompassing various aspects of token creation, distribution, regulation, utilization and sometimes removal. In 1972, B.F. Skinner, a psychologist at Harvard University, first suggested the idea of tokenomics, calling it the “science of token and its economics.” Tokenomics reveal how cryptocurrencies work in a broader ecosystem and how tokens influence the activity in a network. 

Tokenomics can be related to how demand and supply affect the outcome of digital currencies. Assessing the methods used to drive the coin’s usage, adoption or importance can be useful in estimating the future value of a cryptocurrency. Important methods are employed to drive the demand and supply of a cryptocurrency. Each crypto project has an approach used to grow the value of a coin and its adoption, such as mining and staking, token burns, rebasing, activity rewards, yields and many other methods.

Tokenomics provide a solution to what value a crypto has, how the crypto will appreciate, why the developer created the cryptocurrency and what the future of the coin or the token looks like. Some cryptocurrencies, such as Bitcoin (BTC), have a deflationary supply wherein there is a decrease in the supply of coins over time. In contrast, others strive toward stable usage with an inflationary supply that increases over time, like Dogecoin (DOGE).