What is Tokenomics? This Wasn’t Taught in ECON 101
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When many people are introduced to cryptocurrency, they envision themselves making a small investment yielding life changing returns.
Typically, users see the price of a crypto token and become motivated to purchase the in hopes for skyrocketing growth potential and return on investment (ROI).
While price is important to consider when purchasing cryptocurrencies, there are other factors about the currencies that are important to understand the progress and the likelihood of success. These other factors are included within a project’s tokenomics.
Price of a crypto asset tends to be the first metric that stands out as it is viewed as a metric to articulate the value of a project.
Similarly to fiat currencies, the price of cryptocurrencies and tokens is determined by the fundamental economic principle of supply and demand.
The price is also a key metric to finding out what a project’s market capitalization is, which will be elaborated on later in the post.
Additionally, key correlations can be drawn between key moments that have historically occurred in the cryptocurrency industry.
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