What is Tokenomics?

What is Tokenomics?

Cryptocurrency tokenomics are certain components that help form the interaction between a Token, a business, and its project.

It is very important for the tokenomics to be deeply developed and to inspire confidence in its reliability and validity. This is a fundamental factor, because thanks to a well-established system, a project can be implemented successfully. Otherwise, the project may fail. It is important to understand that investing in a Cryptocurrency whose Tokenomics are not good from an economic point of view is a big risk.

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It is necessary to clearly define the purpose of investment in order to understand what the project wants to achieve and what the investor can achieve with this project. Therefore, when interacting with a large technology company, an investor demand indicator is very important.

Every project should have a distribution schedule. It is acceptable for developers to hold part of the Tokens, but no more than 60%. Exceeding this value is a stop-signal for the investor. Make sure that public investors have access to the majority of tokens.

Usually a project has 4 stages of investment:

The ideal would be uninterrupted growth at each mentioned stage. Then the project will look more attractive to investors. Another essential rule: the duration of each following round should be shorter than the duration of the previous one. This is so because the participant who entered the project later than everyone else, pays more for his coins, and he does not have the patience to wait too long for the release.

The investor needs the Token not just to lie in the account, but also to generate profits for him. To do this, it is necessary to determine the purpose of the project and calculate the possible profits and risks. A well-worked out start-up must have detailed goals and ways of achieving them, with described deadlines. In addition, if the project is set up for long-term work, as well as solving important life issues, it is a good reason to invest. Consequently, there is the possibility of obtaining a stable profit in the long term.

One should pay attention to the leaders of this business, those who run it, who are the think tank. This is very important, because it is these people who will move the company forward, and thus generate profits and super profits.

A project with specific goals, functions, and a reward system often needs its own Token. Digital currency is very similar to a loyalty program: it systematizes and simplifies the entire production process. Having a native Token increases a project’s potential profit. And if it’s not there, that’s a reason to think twice.

A focus on the future in the long term, a staffed team of specialists, clear and realistic plans, elaborated goals and deadlines: all this indicates the reliability and sustainable growth of the asset in the future, which unambiguously promises benefits for the investor.

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Written by Kannnaf Mysterious
I am a very innovation-dependent form of life. I'm smart, but I don't wear glasses. I solve the Rubik's Cube in less than a minute. Probably the best beggy cryptomaniac in the world and my hobby is to start the day thinking that bitcoin will rise to $100k. To The Moon!
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