1. What is tokenomics?
Tokenomics analyzes a token's supply, demand, distribution and uses. It is central to assessing a coin's long-term value.
2. Core elements
Total supply
- Bitcoin: Fixed at 21 million.
- Ethereum: No fixed maximum; the source describes burning as creating deflation.
- Dogecoin: No fixed maximum; inflationary.
Token distribution
⚠️ Warning signs
• More than 50% concentrated with the team or early investors → dumping risk.
• Large scheduled unlocks → selling pressure.
• Circulating supply below 10% of total supply → future dilution.
3. Value-accrual mechanisms
- Burning: Part of transaction fees is burned; the source cites BNB and ETH.
- Staking: Locking tokens reduces available circulating supply in this explanation.
- Fee sharing: Protocol revenue is distributed to token holders.
4. Pre-investment checklist
- How does circulating supply compare with total supply?
- Through what mechanism does the token accrue value?
- What is the unlock schedule?