One important consideration for any digital asset investor allocating money to alternative coins is tokenomics. For the uninitiated, tokenomics refers to the economic and financial aspects of a cryptocurrency or project’s ecosystem. It encompasses the design, creation, distribution and management of the native tokens used within the project. Tokenomics plays a crucial role in shaping the economic value of tokens and the incentives of token holders within the protocol’s ecosystem. It involves careful considerations across various interdisciplinary fields, from economic principles, agency problems and game theory to oracle problems and blockchain architecture tradeoffs.
