What do you know about Tokenomics?

Tokenomics is a derivation taken from the words token and economics. To build the ecosystem around the underlying token project, tokenomics play a significant role to convince the users or investors to adopt the same. The changing trend of price tags for different crypto projects depends upon tokenomics. It is used to determine the potential of cryptocurrency so that there could be higher chances for money making more profits from these projects despite losing your investment. For more information you can visit immediate-edge.live

Cryptocurrency is a digital currency token or you can say it is a sect of the cryptocurrency which does not have native coins but it is reliable for different blockchains. Specific activities have been carried out through these tokens for such projects on which they were developed. Tokens were purposefully made. They used to do specific activities for that particular project. tokens were not only used to make a fee. Certain analyzes have been prepared by tokenomics. However, there are so many factors involved to avoid situations where losses have been incurred.

Criteria of token supply and Availability

It is very important to analyze the market value of the particular token before its supply. The availability of tokens is a must. But investors sometimes make big mistakes. They try to calculate benefits availed from tokens when they are abundant in supply and involved with a low market cap. Despite choosing this option, they should prefer tokens while their supply is minimum in the market and they carry huge market cap value. This is how they would be able to make maximum profit out of it. Let’s understand this concept with an example.

Allocation and distribution of tokens

Crypto designs are bifurcated into two categories. One is a fair launch and another is pre-mined. In the first instance ie There is no requirement for token issuance because, in this scenario, several people together make efforts to mine their tokens such as Bitcoin and Litecoin. In the second instance Ie, pre-mined they require token allocation because in this scenario all the tokens or a few of them were mined by the group of people who were working on the project team before delivering to the general public by selling most of them while the project is running for raising the funds, for example, ERC-20 tokens on Ethereum. When a team or number of investors were allocated with too many coins, due to this the crypto growth can be affected because more people will go to sell their token allocation by running behind others.

Concept of awarding and inflation

Vesting plans are applicable for pre-mined cryptocurrencies and their core perspective is to concentrate on the anticipations for the token fundings and allotments in a special duration. However, the investors are responsible to pay more attention to the projects which were unlocked due to an excess amount of available tokens within a small period.it is because there are a lot of chances where these higher value tokens can sink the short period piece potential of the to lend available in the market. Where the value of cryptocurrency can be reduced due to the high inflation of cryptocurrency which already has been circulated and the reduction in cryptocurrencies’ value can be the reason for increasing the value in the long term due to limited supply.

Conclusion

There is a lot to do with token omics and its Carrie bundle of benefits. anyways the above-stated tokenomics characteristics should not be dominated. Moreover, all the stakeholders and investors should prefer to investigate or cross-check their tokens analysis before going deep into it to make sure about the higher chances to make a profit out of it

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