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Understanding tokenomics and its influence on the success of a project

Updated: Jul 12, 2022

Tokenomics, put simply, is the science of token economy. It involves analyzing multiple factors that determine a project’s success and influence its future. In other words, it allows investors to differentiate between good and bad actors in the cryptosphere.

Let’s take a deep dive into tokenomics and how it’s closely linked to a crypto project’s roadmap and growth potential.

Crypto tokenomics: The basics

The term tokenomics, a portmanteau of the words ‘token’ and ‘economics,’ was first used in a 2017 Medium article written by William Mougayar. It has since evolved into a science that explores the core features of a token’s economy, which could include essential factors like utility, usage, and value. While tokenomics is still an evolving concept, it has helped many investors weed out bad crypto projects and has been used to tell what the outlook of a token’s future is.

By understanding a project’s tokenomics, investors can make more informed, confident decisions. Likewise, developers looking to launch a token project can carefully assess their native currency’s tokenomics to become successful and attract investment.