{"id":8141,"date":"2022-09-27T07:18:19","date_gmt":"2022-09-27T07:18:19","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=8141"},"modified":"2022-09-27T07:18:19","modified_gmt":"2022-09-27T07:18:19","slug":"what-are-tokenomics","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/09\/27\/what-are-tokenomics\/","title":{"rendered":"What are Tokenomics?"},"content":{"rendered":"\n<p>So much about the crypto ecosystem is novel and disruptive, including its vocabulary, which features entirely new words, invented to describe entirely new concepts. Tokenomics is a great example. It is what is known as a&nbsp;<em>portmanteau<\/em>, a word that blends the meaning of two other words &#8211; tokens and economics. It fills the empty space in the dictionary to describe how the mechanics of cryptocurrency function &#8211; supply, distribution and incentive structure &#8211; relate to value.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are tokenomics?<\/h2>\n\n\n\n<p>The choice of the term tokenomics&#8217; constituent parts &#8211; token and economics &#8211; may seem a bit confusing if your assumption is that cryptocurrencies are simply new forms of internet money. In reality, crypto can apply to any form of value transfer.&nbsp;<\/p>\n\n\n\n<p>This is why the word&nbsp;<em>token<\/em>&nbsp;is used, because units of cryptocurrency value can function as money, but also give the holder specific utility. Just as a games arcade or laundromat may require that you use a specific token to operate their machines, many&nbsp; blockchain based services will be powered by their own token, which unlocks specific privileges or rewards:<\/p>\n\n\n\n<ul><li>DEFI &#8211; users are rewarded with tokens for activity (borrowing\/lending), or tokens are created as synthetic versions of other existing cryptocurrencies<\/li><li>DAOs &#8211; token holders get voting rights within Decentralised Autonomous Organisations, new digital communities governed by Smart Contracts<\/li><li>Gaming\/Metaverse &#8211; where game activity and in-game items are represented by tokens and can have exchangeable value<\/li><\/ul>\n\n\n\n<p>If we add this understanding of cryptocurrency as tokens, to the traditional definition of economics &#8211; measuring the production, distribution and consumption of goods and services &#8211; we can breakdown what tokenomics within cryptocurrency measures into:<\/p>\n\n\n\n<ol><li>how tokens are produced via their&nbsp;<strong>supply schedule,&nbsp;<\/strong>using a specific set of<strong>&nbsp;supply metrics<\/strong><\/li><li>how tokens are&nbsp;<strong>distributed&nbsp;<\/strong>among holders<\/li><li>the&nbsp;<strong>incentives<\/strong>&nbsp;that encourage usage and ownership of tokens<\/li><\/ol>\n\n\n\n<p>We can start to unpack these aspects of tokenomics by looking at the supply schedule for the first ever cryptocurrency, Bitcoin.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>So much about the crypto ecosystem is novel and disruptive, including its vocabulary, which features entirely new words, invented to describe entirely new concepts. Tokenomics is a great example. It is what is known as a&nbsp;portmanteau, a word that blends the meaning of two other words &#8211; tokens and economics. It fills the empty space [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[508],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/8141"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=8141"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/8141\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=8141"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=8141"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=8141"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}